A Lump Sum equity release allows you to release a one-time, tax-free cash lump sum from the value of your property. This option is ideal if you have a specific financial goal in mind, such as paying off an existing mortgage, funding home improvements, or helping family members financially. The loan amount and any accrued interest will be repaid when the homeowner(s) pass away or move into long-term care.

With an Interest Roll-Up Mortgage, you borrow a lump sum or receive regular payments, but you don’t make monthly interest repayments. Instead, the interest is added to the outstanding loan balance over time. This means the total amount owed will increase gradually. The loan, along with the accumulated interest, is repaid when the property is sold or the homeowners pass away.

Drawdown and Income equity release provides you with the flexibility to release funds as and when you need them. Rather than taking a lump sum initially, you set up a “drawdown” facility, allowing you to take smaller amounts when required. This option can be beneficial if you want to manage your finances more effectively and avoid paying interest on funds you don’t need immediately. Additionally, some plans may offer the option for regular income payments.

An Interest Paying Mortgage is a less common type of equity release. With this option, you have the choice to pay off the interest regularly, similar to a conventional mortgage. By making interest payments, you prevent the outstanding loan balance from increasing, which can help preserve more of your property’s value for inheritance purposes. The loan is typically repaid when you move into long-term care or pass away.