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Is equity release safe?

  • All of the plans we recommend meet Equity Release Council standards
  • They come with several protections
  • We'll explain the benefits, drawbacks and costs

Is it right for me?

Download our free guide to:
  • Learn about equity release safety
  • If it could be right for you
Download now
Key guide cover image
Is equity release safe? Cover image

Considering equity release?

It's normal to have questions like, "Is equity release safe?".

Watch our video to learn about the safeguards that come with equity release recommended by Key.

How safe is equity release?

Equity release products come with a range of safeguards and protections. At Key we always make sure that our customers are well-informed and well-protected.

All lifetime mortgages we recommend meet the Equity Release Council standards, meaning you'll:

Never owe more than the value of your home

The no negative equity guarantee means you'll never owe more than your home's future value, so any debt accrued through equity release can't be passed on to your loved ones. However, a lifetime mortgage may leave limited or no equity in your property. It will reduce your financial options in the future.

Have the right to move to another property

If you do wish to move, you'll have the right to take your equity release plan with you to a new home, subject to criteria at the time.

Have the right to stay in your home for life

With a lifetime mortgage, you keep full ownership of your property. This gives you the right to stay in your home for life. This applies to a payment-term lifetime mortgage after the mandatory payment period ends when you turn 66.

Have the right to downsize in the future

Downsizing protection typically applies after five years of taking out your plan. If you need to move home but your new property doesn't meet the lender's criteria, you can repay your loan in full without an early repayment charge.

The Equity Release Council is an industry body founded in 1991 that oversee the equity release industry to ensure safety. Their code of conduct protects consumers in some of the following ways:

  • You must receive advice: This includes specialist equity release advice and legal advice as part of your equity release journey

  • You must meet with a solicitor: All customers taking out an equity release plan must have at least one face-to-face meeting with an independent solicitor

  • There must be interest rate options: For a lifetime mortgage, interest rates must be fixed or variable. If they're variable, there must be an upper limit which is set for the life of the loan

Not all equity release providers are Equity Release Council members. You can find a list of all members, which includes Key, on its website.

What are the main risks of equity release?

Like a lot of other financial solutions, there are potential risks to be aware of. Equity release isn't right for everybody, and understanding the equity release risks involved is essential. 

With a lifetime mortgage, typically interest will accrue and roll up – before being added to the loan amount. This is called compound interest and will significantly inflate how much needs to be paid back at the end of the plan.

If you receive means-tested state benefits, the amount of tax-free money you release from your home could affect your eligibility or entitlement.

Benefits and drawbacks cover image

Watch our video to learn more about the benefits and drawbacks of equity release and learn the answer to the question, “could releasing equity be right for you"?

All our equity release advice relates to lifetime mortgages - a loan secured against your home.

Video transcript (pdf)

 

 

Find out more about equity release safety

Equity release is a big decision, so it’s important that you have all the facts, including understanding any equity release risks involved.

Download your free, comprehensive guide today to see if equity release is right for you.

Download now

Why choose Key as your equity release adviser?

Key is a specialist, award-winning equity release provider for the over 55s. We've helped over a million customers see if equity release was right for them. After we take the time to understand your needs, we'll recommend the most suitable later life option for you.

Trusted award-winners

We've won 80+ awards and are rated 'Excellent' on Trustpilot with 17,000+ reviews. This makes us the UK's most trusted equity-release specialist.

We're regulated experts

Key is regulated and a proud member of the Equity Release Council.

Covered by the FSCS

Equity release advising and arranging is covered by the FSCS, so you'll be protected by up to £85,000.

Trustpilot
Trustpilot

Customer stories

Don't take our word for it - see what our lifetime mortgage customers are saying...

Key equity release customers giving testimonial

Michael and Carol

64 & 63, approaching retirement

"All the worries and the stresses have gone now. We can just look forward to having a nice relaxing retirement…We’re planning to go away on a couple of cruises."
Read more on Michael and Carol

Watch more of our customer stories

Next steps to release equity from your home

Download your free guide

  • Learn how equity release works

  • Explore your other options

  • See if it's right for you

Download now

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  • Get your questions answered

  • See if it could be right for you

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Your other options with Key
If another product is more suitable, we'll refer you to a different specialist adviser within Key Group who can help. If you go ahead, you'll never be charged more than our standard fixed advice fee of £1,699, even if their fee is higher.  Key offers alternatives to equity release such as a retirement interest-only mortgage or retirement repayment mortgage.

Other options to think about
It's important to know your other options before going ahead with equity release, and to consider any equity release risks involved. These include: downsizing, unsecured lending, using existing assets, or support from friends or family.

Equity release FAQs

Equity release could be right for you if you're looking to unlock some of the value tied up in your home.

Before deciding, it's important to explore your other financial options and consult with a qualified equity release adviser to ensure it aligns with your long-term goals and circumstances.

Check with your equity release adviser to find out more.

More on is equity release right for me

  1. Choose a provider with protections
    Select a provider who is a member of the Equity Release Council. This ensures they adhere to industry standards designed to protect you, such as the No Negative Equity Guarantee, meaning you will never owe more than the value of your home.

  2. Consult with an equity release adviser
    Speak with a qualified equity release adviser. They can help you understand how it will impact your estate, any benefits you receive, and the overall cost of the plan.

  3. Review your options
    Take time to carefully read the terms and conditions of any equity release plan. Make sure you fully understand any fees, interest rates, and long-term obligations. Ask questions and request clarifications before committing.

  4. Discuss with family
    If equity release could affect your family’s inheritance, have an open conversation with your loved ones. This will ensure they understand your decision and how it may impact them in the future.

Yes, with a lifetime mortgage, you will still own your home.

You borrow against your home’s value while retaining ownership and the right to live there for as long as you wish. The loan is typically repaid when the property is sold, usually after you or your partner pass away or move into long-term care. Learn more about owning your home with equity release in our guide.

It’s important to note that a lifetime mortgage does reduce the value of your estate, but you maintain full ownership of your home throughout the process.

Yes, equity release can affect your benefits.

If you receive or are eligible for means-tested benefits, equity release could push you over the threshold for certain benefits. Such as Pension Credit or Housing Benefit. Learn more about how equity release affects benefits.

It’s important to consult an equity release adviser to understand how equity release might affect your benefits before proceeding.

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Page last updated: Thursday 20 February 2025

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