How does equity release work?

So how does equity release work? Well, there are two types of equity release scheme available in the market, with several variations on each. The lifetime mortgage involves taking out a new loan secured on your property, and the home reversion plan involves selling a share of ownership of your property.

Both types work very well – but for most people it will be down to their individual circumstances which one suits them best. Here are some of the things you need to take into consideration:

• How much money you can raise
• What will be left for your heirs
• The impact of dying earlier, or living longer, than expected
• The impact of inflation on your circumstances, including your income and the value of your property
• Whether or not you can move into a nursing home without having to sell your house
• How much more you can raise in the future, and at what cost
• Whether or not you’ll be able to transfer the scheme to another house if you need to move at a later date, perhaps to be nearer to relatives