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Is equity release right for me?

We understand it’s important you have all the information you need about equity release to make an informed decision in your own time. But rest assured, if equity release isn’t right for you, we’ll tell you.

When considering equity release, it's natural to have questions like, "Is equity release right for me?".

Watch our video to find out more about equity release and how it works.

You can also read our guide below for more information to help make a decision that's right for you.

What is equity release?

Equity release is a way for homeowners aged 55 or over whose property is worth at least £70,000 to release some of the tax-free funds from their home. The two types of equity release are a lifetime mortgage or home reversion plan. All our equity release advice relates to Key lifetime mortgages only - a loan secured against your home. 

It's regulated

No negative equity guarantee

  • All Key lifetime mortgages come with a no negative equity guarantee, so you’ll never owe more than your home is worth

You need advice

  • Receiving expert advice is a regulatory requirement and our fully-qualified equity release advisers are here to help - if equity release isn’t right for you, they’ll tell you

What should I consider before going ahead?

Our fully-qualified, specialist equity release advisers take the time to understand your needs, ensuring they find and recommend the right outcome for you. Your application won’t be considered without specialist equity release advice. We understand that when you’re considering equity release there’s a lot to think about, which is why there's no pressure to proceed.

Lifetime mortgage benefits

Your specialist equity release adviser will explain:

  • You can unlock cash from your home, tax-free, to help meet your needs in later life
  • You’ll always retain full ownership of your home and can stay in it for as long as you wish with a Key lifetime mortgage
  • You can choose to make reduced or no monthly repayments to suit your circumstances
  • You’ll never owe more than your home’s worth with a Key lifetime mortgage
  • You may be able to remortgage your plan in the future to release further funds or secure a better interest rate, although this isn’t guaranteed and may be subject to early repayment charges

Potential drawbacks

Your equity release adviser will also outline the following important things to think about:

  • A lifetime mortgage is a loan secured against your home and subject to compound interest, meaning the amount you owe can grow quickly
  • Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits
  • Equity release may leave you with limited or no property equity remaining
  • Equity release will reduce your financial options in the future
  • A lifetime mortgage is a long-term financial product and is not designed to be fully repaid until the death or entry into long-term care of the last remaining borrower, otherwise early repayment charges may apply

You should also consider the impact of house prices

If you’re considering equity release, it’s important to consider the value of your home now and in the future, as it will affect any potential inheritance you want to pass on.

Property values have gone up
Over the last few decades, average UK house prices have risen steeply; more than doubling in the last 20 years. If you take a lifetime mortgage and house prices continue to rise, you may build up more equity to leave to your loved ones, as the plan continues over time. Please remember that compound interest will continue to accrue over the term of the plan.

But they may also go down
However, it’s also important to understand that house prices may fall during the life of your plan, which would reduce the amount of inheritance remaining. But with a lifetime mortgage from Key, you can never owe more than your home’s worth or pass on any equity release related debt to your loved ones as all plans come with the no negative equity guarantee.

ⓘ Did you know...

This example assumes an annual fixed interest rate of 6.74% and house price inflation of 1%. Please note that these are only examples and the value of your house could go down or not increase at the same rate. Lifetime mortgage amount and property value are based on the average values in Q1 Market Monitor 2023.

- When you take your plan After 15 years with interest
Property value £363,319 £421,802
Lifetime mortgage balance £81,703 £223,914
Remaining equity £281,616 £197,888

When is equity release not right for me? 

At Key, we understand that equity release isn’t suitable for everyone. That’s why we’ll always be honest and tell you if we don’t believe a lifetime mortgage is the right option for you. 

To help, we’ve highlighted a selection of scenarios below where equity release could be the right solution for your needs, and when it’s not. Your specialist Key equity release adviser will work with you to determine whether a lifetime mortgage is right for you during your initial appointment.

✓ Examples of when equity release could be the right solution

  • I want or need to clear my existing mortgage
  • I want to boost my finances and stay in the home I love
  • I want or need to give my family a financial gift
  • My retirement income is not sufficient to make the most of later life

✖ Examples of when equity release isn't a solution

  • I'm under 55 years old
  • I need to borrow less than £10,000
  • I'm not willing to repay any existing debt secured against my home
  • I want to use the money for short-term borrowing needs

Equity release helps thousands of homeowners across the UK take control of their finances, so that they can live the later life that they deserve.

Explore how Key could help you put the life in later life.

Request your free, comprehensive guide today.

Am I eligible for equity release?

If you're thinking about releasing equity from your home, it's important to find out if you're eligible.

You can check this by using our free online calculator.

To take out a lifetime mortgage with Key, you must be a UK homeowner:

  • Aged 55+ (including all joint applicants)
  • With a property worth £70,000+

ⓘ Did you know...

If you're not eligible now, why not try our later life mortgage finder? It may be that we can still help you take control of your later life finances.

 

Back to contents

What are my other options?

Before going ahead with equity release, make you sure you've considered your alternative options. 

Home reversions

  • Type of equity release where you sell all or part of your home to a reversion company for less than market value
  • You don’t own your home anymore, but can stay there, rent-free, for life

Downsize or remortgage

  • Downsizing can be a good way to free up cash if you're happy to move home
  • Remember you could also consider a retirement mortgage to help reach your later life finance goals

Asking for financial help

  • If your family have the financial means, they may be able to offer you a gift or a loan
  • They'll often be all too happy to help you find a solution

Savings or investments

  • If you have enough money saved, you should look to use this first
  • Consider whether you'll need it for other things in the future

ⓘ Did you know...

You could also make sure you're getting all the benefits you're entitled to. Our advisers can help you check what you're entitled to and tell you how releasing equity could affect any means-tested benefits you may already receive.

Other options from Key

Aside from lifetime mortgages, we offer other later-life financial options which may be better suited to you.

Retirement interest only mortgages (RIOs)

  • A conventional mortgage where your monthly repayments are limited to the interest of the mortgage

  • Mortgage is paid back from the sale of your home when you, or the last remaining applicant, pass away or enter long-term care

  • More on RIOs

Retirement repayment mortgage

Why choose Key as your equity release adviser?

It's a regulatory requirement for anyone considering equity release to get specialist advice before taking out a plan. So why should you choose Key as your equity release company?

We're regulated experts

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

Trusted award-winners

We've won 80+ awards and 17,000+ excellent Trustpilot reviews, making us the UK's most trusted equity-release specialist

Best Equity Release Adviser 2022

Highly experienced

We have over 20 years' experience in helping more than a million over-55s with tailored equity release advice on later-life products. Our knowledge means that, once we've taken the time to understand your needs, we’ll have a sound idea of what the right plan is for you.

Customer stories

 

ⓘ Did you know...

Over the years, more than a million customers have benefitted from our expert advice, experience and professionalism from Key. We've been rated 'Excellent' on Trustpilot and you can check out the great things our customers have to say about our equity release plans.

All members of Key I spoke to were helpful and friendly, nothing was too much trouble for them

Ms Kane

"I recommend Key to anyone looking to take out equity from their home. My request went through very quickly, I already have my money and am starting to do the projects I wanted the money for. I am very pleased with the outcome and Key's staff."

I must say that Key were very helpful and understanding through the whole process

Mr Griggs

"We were put under no pressure to complete and constantly told that we could back out at any point prior to completion. They fully explained all of the Implications and costs of what we were thinking of doing. We had our own adviser who was patient with us and explained everything to us. So if you are thinking about equity release I would recommend Key."

We used Key to provide funds to upgrade parts of our house


Mr Dennison

"The Company were professional, supportive and explained the process very clearly. The meetings with Key which were conducted on Zoom were informative and friendly and at no time did we feel pressured. It was a positive experience. We would recommend Key to anybody considering equity release."

Things to consider

  • You should always think carefully before securing a loan against your home to repay existing debt
  • The loan, plus compound interest, is typically repaid through the sale of the property when the last remaining applicant passes away or moves into long-term care
  • Our fixed advice fee of £1,299 is only payable on completion
Page last updated: Tuesday 11 July 2023