Equity Release

As specialist equity release brokers, we can help you find a mortgage that'll provide you with that added freedom to enjoy a better standard of life

The Lending Channel is fully authorised and regulated by the Financial Conduct Authority (FCA). We are also an accredited member of the National Association of Commercial Finance Brokers (NACFB), the national trade body for brokers finance for businesses. Operating as a professional Code of Practice for the industry, you can have complete peace of mind knowing we are a team that puts you and your financial needs first.

Give us a call to discuss equity release mortgages or any other type of specialist mortgage or financial services.

What is an equity release mortgage?

If you are a homeowner who is aged 55 or over, equity release is a means of accessing the wealth that is the value of your property. Without selling or moving out, you can take a tax-free sum to help you enjoy your later years, whether as a lump sum or smaller monthly payments.

How does equity release work?

While many people seeking some capital opt for a Second Charge Mortgage to protect a low interest rate on their existing mortgage, it is not always the ideal approach for those later in life.

There is a vast amount of information out there reading plans, mortgages and the equity release market, and we know it can be challenging to understand how the process works. As a team of expert and trusted equity release advisers and brokers, we are here to offer you honest, unbiased advice as we help you find the best deals tailored to your needs. 

There are always important things to consider regarding loans secured on your property, including equity release routes, as that means your property is at risk if you can't meet the agreed repayments at a future date. 

Some of the top considerations for whether releasing equity the right option for you include:

  • Your age
  • Your current income
  • How much money you would want to release
  • Your plans for the future.

To discuss the process, your property or the type of equity release plan which would be best suited for you, get in touch, and we'll help you in any way we can. We avoid jargon and confusing sales tactics, providing just a simple and straightforward service.

The types of equity release

The types of equity release schemes you can consider include Lifetime Mortgages or Home Reversion Plans, both of which provide a fixed percentage of your home's value today, as you agree to sell that percentage of your home's value to the lender.  

There is no fixed 'term' or date by which you're expected to repay your loan for these products. The advance is only repaid after you pass or if you have move home, such as to enter long-term care.

You should remember that the money you receive from equity release might affect your entitlement to state benefits and your tax liability, including inheritance tax. There might also be early repayment charges if you change your mind, which could be expensive.

Lifetime Mortgages 

This process is when you take out a mortgage secured on the property you own (typically up to 35% of its current value), all while retaining ownership. 

You can pay the interest annually to avoid it building up (which is known as an Interest-only Lifetime Mortgage); otherwise, monthly repayments will continue to roll up for as long as the loan is in place.

Upon the homeowner's passing, or if they are moved into long-term care, the amount of the loan and any accrued interest is settled using the funds from the sale of your home.

Home Reversion Plans

For this type of plan, you sell all or a part of your property to a loan provider. You'll receive a tax-free sum or a series of smaller regular monthly payments, all while continuing to live in your home rent-free until you die or move into long-term care.

At the end of a Home Reversion Plan, your property is sold, and the proceeds are then shared according to the final percentages of ownership.

When considering a Lifetime Mortgage, it’s useful to know:

  • The minimum age at which you can take out a lifetime mortgage is usually 55.
  • You can typically borrow up to 60% of the value of your property. How much depends on your age and the value of your property at the time of the agreement, but this can be as low as 30%.
  • Interest rates usually are fixed throughout the agreement's life, but there must be an upper limit agreed upon if they are variable. That cap is then set for the life of the loan (Equity Release Council standard).
  • You have the right to remain in your property for life or until you need to move into long-term care, provided the property remains your primary residence.
  • You have the right to move to another property in future, subject to the new property being acceptable to your product provider as sufficient security for your equity release loan.

When considering a Home Reversion Plan, you can:

  • Sometimes release equity over several payments, rather than as a single lump sum.
  • The minimum age is often set at 60 or 65.
  • Have a 'no negative equity guarantee'. This means that when your property is sold and agent and solicitor fees have been paid, even if the amount left is not sufficient to repay the outstanding loan owed to your provider, your estate's beneficiaries will not be liable to pay any more.
We are a credit broker, not a lender and are paid a commission by our lenders, full details of this along with our fees will be detailed in the Terms of Business we issue to you.

The Lending Channel ltd is a member of the National Association of Commercial Finance Brokers (NACFB).

2/1 King James VI Business Centre, Friarton Road, Perth, PH2 8DY
Tel: 01738 583008 | Fax: 01738 500402

The Lending Channel ltd are authorised and regulated by the Financial Conduct Authority.
FCA number 626787
Company number SC334818
Data Protection Act: Z2030159


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