First, what is equity? - Your equity in a property is the amount that you own outright. So, if you have a property worth £400,000 and do not have any mortgages secured on that property, then you have £400,000 equity. Whereas if you have a £100,000 mortgage on the property, then your equity is £300,000.
Equity release allows you to withdraw a tax-free sum from your property without having to sell it or live somewhere else.
It is a flexible way of accessing funds, as you can either receive the money in one lump-sum, or have it released in stages over a period of time, depending on the scheme you choose.
Money raised can be used for any legal purpose, for example home improvements, holidays, gifts to family, holiday home, new car, or to simply provide regular additional spending money.
The loan will be secured against your property and the interest charged is added to the loan facility on a monthly or annual basis.
On many plans interest payments are not required each month, instead it is repaid when the loan is redeemed.
Equity release offers flexible repayment options, so you can choose a plan that is suitable for you.
Fixed-rate options where the interest rate is fixed for the full term of the loan.
If you are over 55, equity release could be ideal for you if you have debts you want to pay off, your property needs refurbishment, or you would like a boost of income during retirement.
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