Equity release | Is it right for me?

Taking out an Equity Release plan is an important decision. Homeowners need to consider carefully, not only the benefits of Equity Release, but also any potential downsides. They also need to look at what other options are available to meet their needs.

Firstly, it is important to understand that Equity Release reduces the value of your estate and so the amount that goes to your beneficiaries – your loved ones who will benefit from any inheritance you leave – when the property is sold.

You also need to consider what happens if your needs change after taking a Lifetime Mortgage product. If you need care at home or you wish to move to a smaller property for instance, there may not be enough equity left in your property to fund this. And if you wish to repay the loan early, you may face early repayment charges. You also need to be aware that if you are receiving means tested benefits, you may lose entitlement to these if the money you release takes you above the eligibility limits of these benefits.

You may have other options besides ER to meet your particular needs. Do you have other assets, such as investments that could boost your income or provide you with a lump sum or could friends or family provide support?

Could you downsize? – sell your home and move to a less expensive property, or could you rent a room in your home? Or is it possible to find a bit more room in your budget? All these things need to be considered in deciding if Equity Release is right for you.