Using Equity Release for Care Costs
As we get older, we may need extra help with daily tasks like cooking, cleaning, or getting dressed. Whether you need care at home or are thinking about a care home, the costs can be high. If you’re wondering how to fund later life care without selling your home, using equity release for care costs could be a solution.
What is Equity Release?
Equity release helps homeowners aged 55 and older access money from their property. They can still live in their home while doing this. This can help with paying for care costs without having to move or sell your home.
How Can Equity Release Help with Care Costs?
Different ways equity release and care costs can work together exist:
- Pay for a carer at home – Stay in your home and use the money to cover care services.
- Adapt your home – Use funds to make changes like installing a stairlift or walk-in shower.
- You can cover care home fees by using equity release, which provides funds to help with the move. (Your partner would need to remain in the property)
Types of Equity Release for Care Costs
- Lifetime Mortgage – This is a loan against your home’s value. You don’t make monthly payments (unless you wish to), but interest builds up over time. You pay back the loan when you pass away or move into long-term care.
- Home Reversion Plan – You sell part or all of your home to a provider. In return, you get a lump sum or regular payments. You can still live in your home without paying rent.
Things to Consider Before Using Equity Release for Care Costs
While using equity release for care costs can be a helpful solution, it’s important to consider:
- Impact on Inheritance – Releasing money from your home reduces the amount left in your estate.
- Interest compounds – If you don’t make repayments, the amount you owe increases over time.
- Effect on Benefits – Receiving a lump sum may affect eligibility for Pension Credit or Council Tax Support.
- Fees and Costs – There may be legal, valuation, and arrangement fees.
How to Fund Later Life Care Without Selling Your Home
If you don’t want to sell your home but need help paying for care costs, consider these options:
- Equity Release – Access funds from your home while continuing to live in it.
- State Benefits – You may qualify for financial help from your local council or the NHS.
- Savings & Pensions – Using your savings or pension can be another way to cover care costs.
- Deferred Payment Scheme – Some councils offer this scheme, where you delay paying care fees until you sell your home in the future.
Is Equity Release Right for You?
Equity release is not the only option, and it may not be right for everyone. Before making a decision, speak to a specialist Equity release adviser who can explain all your choices.
Next Steps
If you’re thinking about how to fund later life care without selling your home, follow these steps:
- Get Expert Advice – A specialist Equity release adviser can help you explore all your options.
- Check What Support is Available – See if you qualify for benefits or council funding.
- Understand the Costs – Be aware of interest rates, fees, and long-term impacts.
- Talk to Your Family – Equity release affects your estate, so it’s good to discuss it with loved ones.
Final Thoughts
Equity release can be a way to pay for care costs while staying in your home. However, it’s important to understand the risks and explore other options too. Always seek professional advice to find the best solution for your later life care needs.
Would you like more information on how to fund later life care without selling your home? Speak to a specialist today to find the right plan for you.
