Frequently asked questions about equity release.

Simply put, your equity is the value of your home minus any loans secured against it. For example, if you owned a home worth £200,000 and had a mortgage balance of £50,000 secured against it, your equity would be £150,000.

Equity release is the process of transforming the equity that you hold in your home into cash which you can spend. Traditionally, the easiest way to achieve this was by downsizing to a smaller property. However, with equity release products, like a Lifetime Mortgage, you can release equity as a tax-free cash lump sum by borrowing against the value of your home and remain living there.

You could be eligible for equity release if you:

• Are aged 55 or over.
• Own or intend to own a UK property worth at least £70,000.
• Are mortgage free or able to clear your existing mortgage on completion.
• Want to release at least £10,000.

If you already have a mortgage secured against your home, you can still be eligible for equity release. As long as you can clear your existing mortgage on completion of your Lifetime Mortgage, then you will be eligible.

Many people choose to use the release itself to clear the outstanding mortgage amount, but you can also use other funds, if you have any available to do so. In fact, clearing an existing mortgage is one of the most popular reasons for people who are considering releasing equity from their home.

The amount of equity that you can release is based on a variety of factors but will mainly be influenced by your age and the value of your home. If you would like to see an estimate of the amount that you could release, then you can use our free equity release calculator. In some cases lenders may take into account other factors. If you would like a more accurate picture of the amount you can release, call our Information Team today on 0800 048 5384 and book in your no-obligation appointment with one of our fully qualified advisers.

To arrange a call with the team at a time of your choosing, click here now.

With a Lifetime Mortgage, you do not need to make any payments towards what you owe unless you choose to do so. Rather than requiring monthly payments, the interest is added to what you owe and builds up over time.

There are plans available that allow you to make voluntary payments, typically of up to 10% of the original amount borrowed per year without penalty. This can help you to reduce the impact of your Lifetime Mortgage on your estate.

A Lifetime Mortgage does not need to be repaid until you have either died or entered permanent long-term care. The full amount, plus interest, will then usually be cleared with the sale of the home.

Equity release plans have changed, and now come complete with a number customer-focused safeguards introduced by the Equity Release Council. The Council is a voluntary body committed to increasing transparency and protecting consumers.

For example, the Equity Release Council uphold a no-negative-equity guarantee to ensure you won't pass on Lifetime Mortgage debt to your loved ones. Should your Lifetime Mortgage ever exceed the value of your home, for example, in the event that the value of your home saw a huge decrease, this guarantee means that the amount owed is capped at the value of your home when sold at market price.

The Equity Release Council is a voluntary membership body that ensures best practice in the equity release industry. It ensures that consumers are protected by a code of conduct which seeks to offer security. All Lifetime Mortgages that Responsible Equity Release advise on will come from a lender approved by the Equity Release Council. As such, you will benefit from the following safeguards:

• A no-negative-equity guarantee, meaning that you will never owe more than the value of your home.
• The option to fix the interest rate on your Lifetime Mortgage for life.
• The guaranteed right to remain in your home for life or until you enter permanent long-term care.

To protect you and your family against any changes in the housing market your Lifetime Mortgage will be covered by a no-negative-equity guarantee.

The no-negative-equity guarantee is one of the safeguards provided by the Equity Release Council. Should your Lifetime Mortgage ever exceed the value of your home, the guarantee ensures that any excess is absorbed by the lender. This means you will not pass on Lifetime Mortgage debt to your loved ones.

When releasing equity you can still leave an inheritance for your loved ones, as current interest rates mean it is highly unlikely that you will ever owe more than the value of your home.

If you are concerned, some products will have the option to ring-fence a portion of your home's value as a guaranteed inheritance. This means that even on repayment, the lender won't be able to touch this guaranteed amount. Ring-fencing an inheritance might however reduce the amount of equity the lender will be able to offer you from your initial release.

For some, they use the equity that they release from their home to advance an inheritance to their loved ones early, and see it used within their lifetime.

A Lifetime Mortgage will allow you to release some of the equity tied up in your home by borrowing money secured against its value. You retain complete ownership of your home and interest will build up over time.

With a home reversion plan you will sell a portion of your home to a provider. The sum will usually be far below the market rate as you are being permitted to remain there rent-free. You will also no longer own the entirety of your home.

Responsible Life only advise on Lifetime Mortgages as you will retain 100% ownership of your home and we believe that they represent better value and offer better protections for our customers.

Choosing the right company to help you release money from your home is important.

At Responsible Equity Release, we pride ourselves on our service, maintaining a reputation for using a wide range of lenders and prioritising flexible features throughout. With the range of products available, you can be assured that we will work to achieve the right outcome for both you and your family.

The lenders we use are also members of the Equity Release Council, ensuring that you will enjoy a variety of customer-first safeguards.

Additionally, by not being tied to any particular lender, we can guarantee impartial advice. It does not matter to us which lender we use, so long as it is the right one for your personal circumstances.

When you release equity, you are accessing a portion of the funds that you have built up in your home. As a result of this, the value of your home, when it is sold, may be lessened due to already accessing a portion of its value, in addition to the interest accrued over the duration of your Lifetime Mortgage.

Releasing equity with a Lifetime Mortgage could have an impact on any means-tested benefits that you are currently in receipt of, or might look to receive in the future. Given that the amount is released as tax-free cash, this is no longer held within your home and as such might count towards savings or disposable income for the purposes of determining eligibility for means-tested benefits.

An adviser can assist you in mitigating the possible impact releasing equity might have with regard to means-tested benefits, however it is important to be aware of this fact even before you enquire with us so that you can consider your personal circumstances and make sure your adviser is fully informed.

Yes, equity release is regulated by the Financial Conduct Authority. You can learn more about the FCA at https://www.fca.org.uk/.