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Free equity release guide
Considering equity release?
It's normal to have questions like, "Is equity release right for me?".
Watch our video to learn how equity release works and what it could mean for you.
To be eligible for equity release, you must be:
- Aged 55+ (including the youngest applicant)
- A UK homeowner with a property worth at least £70,000
ⓘ Not eligible yet?
Try our later life mortgage finder. We could still help you take control of your later life finances.
When could equity release be right for me?
Equity release lets you access tax-free cash from your home’s value. It offers a way to help boost your retirement finances. You can use it in several ways, such as:
We've helped over 1 million customers see if equity release was right for them. Watch their personal stories to see how we helped them unlock a better retirement.
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
Read more on Michael and Carol
Watch more of our customer stories
Before going ahead with equity release, it’s important to understand your options. Our expert equity release advisers provide personalised advice to help you make an informed decision. There’s no pressure to go ahead, and if equity release isn’t right for you, we’ll tell you.
Benefits and drawbacks explained
Watch our video to learn more about the benefits and drawbacks of equity release and see if it could be right for you.
Our equity release advice relates to Key's range of lifetime mortgages only - loans secured against your home.
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Transcript
What are the benefits and drawbacks of equity release?
Like any financial product, equity release has potential benefits and drawbacks to weigh up.
Benefits
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Tax-free cash: You can unlock cash from your home, tax-free, to help meer your needs in later life
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Stay in your home: You'll retain full ownership of your home and can stay in it for as long as you wish
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Reduced or no monthly repayments: You can make reduced or no monthly repayments with a lifetime mortgage. This applies to a payment-term lifetime mortgage after the oldest applicant turns 66, and overpayments can be made at any time, subject to criteria
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No negative equity guarantee: You'll never owe more than your home's worth or pass on any equity release related debt to your family, provided terms and conditions are met
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A payment-term lifetime mortgage: Could allow you to unlock more of your home's value at a lower interest rate than a comparable lifetime mortgage
Drawbacks
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The interest can build up quickly: Lifetime mortgages and payment-term lifetime mortgages are loans secured against your home and are subject to compound interest, meaning the amount you owe can grow quickly
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Reduced value of estate: Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits
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Long term financial product: These are long-term financial products and are not designed to be repaid early. If you do, early repayment charges may apply
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Reduced or no property equity: Equity release may leave you with limited or no property equity remaining and will reduce your financial options in the future
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Mandatory payments: There's a period of mandatory payments with a payment-term lifetime mortgage, and your home may be repossessed if you don't keep up with these payments
We only recommend equity release if it's right for you
You have to receive qualified advice before taking out equity release, so you can be sure it's the right decision for you
All our equity release advice relates to Key lifetime mortgages and payment-term lifetime mortgages only - loans secured against your home.
Our fixed advice fee of £1,299 is only payable on completion. Equity release will reduce your estate's value and may affect your entitlement to means-tested benefits.
A lifetime mortgage or payment-term lifetime mortgage may result in limited or no property equity remaining and will reduce your financial options in the future.
If you're considering equity release, it’s important to think about your home’s current and future value. This will affect any inheritance you plan to leave behind.
Property values have generally increased
UK house prices have more than doubled in the past 20 years. If property values keep rising, you might build up more equity over time to pass on to your loved ones. Just remember, compound interest will also add up over the life of the plan.
But property values can also fall
House prices might decrease during your plan’s term, which could lower the inheritance you leave behind. However, Key’s lifetime mortgages come with a no negative equity guarantee. This means you won’t owe more than your home’s value, and any equity release related debt won’t be passed on to your loved ones.
Here's an example...
| When you take your plan | After 15 years with interest | |
|---|---|---|
| Property value | £364,586 | £423,273 |
| Lifetime mortgage balance | £78,334 | £195,310 |
| Remaining equity | £286,252 | £227,963 |
This example is based on an annual fixed interest rate of 6.28% and house price inflation of 1%. 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 Key's Market Monitor 2023.
Download your free equity release guide
If you're thinking about equity release, it's important you have all the facts.
Download your free, comprehensive guide today to see if equity release is right for you.
Equity release can be a useful way to boost retirement funds, but it’s not right for everyone. It’s important to understand when equity release might not be the right option for you.
Examples of when equity release isn't right
What are my other options?
Before going ahead, make sure you've considered your other options.
ⓘ Did you know...
Our advisers can also help you find out which benefits you’re entitled to, which could be another option. We’ll explain how releasing equity might impact any means-tested benefits you already receive.
We also 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
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Mortgage is paid back from the sale of your home when you, or the last remaining applicant, pass away or enter long-term care
Retirement repayment mortgage
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Higher age limit than most mortgages
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Capital plus interest repayment
If another product is more suitable, we'll refer you to a different adviser within Key Group to help. If you go ahead, you'll only be charged the same £1,299 advice fee you'd pay with us, even if their fee is usually higher.
Key is a specialist, award-winning later life mortgage 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.
Next steps to release equity from your home
Equity release FAQs
Equity release is a way to access some of the tax-free funds from the value of your home. It can help you take control of your later life finances.
Equity release is available to UK homeowners aged 55 or over. There are two types of equity release available with Key in the UK and they work in different ways.
More on equity release
Equity release reduces the value of your estate. This will mean there may be little or no inheritance remaining for your beneficiaries. With a lifetime mortgage, interest grows over time, which can further reduce what’s left for your family.
An equity release adviser can explain how this will impact any inheritance and help you make an informed choice.
Arrange a no-obligation chat
Yes, you can repay an equity release loan early, but it depends on your plan.
With a lifetime mortgage, you can make early repayments to reduce or pay off the loan. However, lifetime mortgages aren't designed for short term lending and early repayment charges (ERCs) may apply. Check your plan details and talk to an equity release adviser to find out more.
Arrange a no-obligation chat
Yes, you can move to a new home with an equity release plan, but it depends on your plan’s terms. Key's lifetime mortgages are portable (subject to criteria), meaning you can transfer the loan to a new property if it meets your lender’s requirements.
The new property generally needs to be of equal or greater value and in good condition. If it’s worth less, you might need to repay part of the loan.
You might also have to pay some of the funds back if the maximum loan available on your new property is lower than the outstanding balance of your existing lifetime mortgage. Check with your equity release adviser to find out more.
Arrange a no-obligation chat
Equity release plans include several important protections to keep you safe. Key is a proud member of the Equity Release Council.
Key's lifetime mortgages come with a no negative equity guarantee. This means you'll never owe more than your home's worth, even if the amount you borrowed plus interest is more than the property's value.
You’ll also get clear advice from a qualified equity release adviser before you go ahead with a plan.
More on equity release protection
Page last updated: Thursday 10 October 2024