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Mythbuster: "I'll have monthly repayments"

Monthly loan repayments can quickly become a burden, but if that's putting you off considering equity release then there's no need to worry

Are there monthly repayments?

Monthly repayments can be a huge burden, but with equity release there is no need to worry.

Like many of our customers, you may choose to use the tax-free cash to pay off your existing debt and reduce your household’s monthly expenditure, and there’s no need to factor paying it back into your budgeting.

With equity release, you don’t have to make monthly repayments. That’s because a lifetime mortgage, the most popular form of equity release, is a loan secured against your home which, alongside the roll-up interest, is typically paid back when your plan comes to an end. That’s usually when you, or the last remaining applicant, either passes away or enters long-term care.

With a home reversion plan, another type of equity release, you sell all or part of your property to a reversion company for lower than market value to receive a cash lump sum. Therefore, it’s not a loan, as you’re selling all or a stake in your home. By taking out equity release, you can rebalance your household budget much more effectively than with some other lending alternatives.

However, our specialist equity release advisers will always discuss other alternatives to equity release with you to make sure you’re making the right choice for you.

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Is equity release right for you?

Want to know more?

Get all the facts about equity release by downloading our FREE guide to read straight away. Plus, we'll post one out to you at no extra cost. 

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Things to consider

  • All our equity release advice relates to Key lifetime mortgages only - a loan secured against your home
  • Equity release will reduce your estate’s value and may affect your entitlement to means-tested benefits
  • A lifetime mortgage may result in limited or no property equity remaining and will reduce your financial options in the future
  • 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
  • £899 advice fee only payable on completion
Page last updated: Thursday 18 November 2021