Equity release enables homeowners aged 55 and over to access tax-free funds tied up in their property without the need to move. This financial solution can enhance retirement by providing additional income for various purposes, such as home renovations, settling existing mortgages, or assisting family members.
How Does Equity Release Work?
Equity release typically involves a long-term loan that is repaid when you pass away or move into long-term care. Until then, you remain the homeowner, retaining the right to live in your property. It’s important to note that equity release will reduce the amount of inheritance you can leave behind and may affect your tax position and eligibility for welfare benefits.
Types of Equity Release
There are two main types of equity release.
This is the most common form, where you take out a loan secured against your home. You retain ownership, and the loan plus interest is repaid when the property is sold.
This involves selling part or all of your home to a provider in exchange for a lump sum or regular payments, while retaining the right to live in the property rent-free.
Advantages of Equity Release
Unlock funds from your property to use as you wish.
Choose between lump sums, regular payments, or a combination to suit your needs.
Typically, there are no required monthly repayments; the loan is repaid upon the sale of your home.
Considerations
Releasing equity will reduce the value of your estate and the inheritance left to beneficiaries.
Receiving a lump sum could affect your eligibility for means-tested benefits.
Interest on the loan accumulates over time, potentially reducing the remaining equity in your property.
Why choose Cornerstone
Before you commit to an equity release plan, it’s a requirement of the Financial Conduct Authority (FCA) to receive regulated advice to ensure you make an informed decision.
Cornerstone Finance believes that because it’s a regulatory requirement, you shouldn’t have to pay for advice. So all of our equity release advice relates to our range of Key branded products and is completely free of charge.
We always have your interests at heart, and we’ll support you every step of the way from application to completion without ever charging you a fee for our advice.
Your specialist equity release adviser will explain:
- You have to get advice before releasing tax-free cash from your home – please read all our information and make sure it’s right for you
- All of our plans meet the Equity Release Council standards and come with several protections, including the no negative equity guarantee, which means you’ll never owe more than your home’s value
