What is Equity Release?

Welcome to our guide on equity release, a financial solution that allows homeowners to access the equity tied up in their property. If you’re a homeowner looking to supplement your retirement income, fund home improvements, or achieve other financial goals, equity release might be the right option for you.

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What is Equity Release?

Equity release is a financial product designed for older homeowners (typically aged 55 and above) who own their property outright or have a considerable amount of equity in their home. It provides them with a way to release some of the value of their property as either a lump sum or a series of smaller amounts.

Types of Equity Release

Lump Sum: 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.

Interest Roll-Up Mortgage: 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: 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.

Interest Paying Mortgage: 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.

With any of these forms of Equity Release you continue to own your property. Read more about this in one of our latest posts.

Why Choose Equity Release?

Aspire Equity Release is a leading provider of equity release solutions, offering a range of products tailored to meet your individual needs. Our team of expert advisors will guide you through the process, ensuring you have a clear understanding of all the details involved.

Benefits of Aspire Equity Release

  • Years of Experience: Aspire has been helping homeowners unlock the value of their homes for decades, giving us the expertise needed to provide you with the best advice and support.
  • Personalised Solutions: Our team takes the time to understand your unique circumstances and financial goals, creating bespoke equity release plans that suit your needs.
  • Regulated and Trusted: Aspire Equity Release is regulated by the Financial Conduct Authority (FCA) and are members of the Equity Release Council (ERC), providing you with peace of mind and ensuring that you receive fair treatment throughout the process.
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