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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.

Many of our customer choose to use the tax-free cash they release from their home to pay off existing debt and reduce their household's monthly expenditure, with no need to factor paying it back into their budgeting. Although you should always think carefully before securing a loan against your home to repay existing debt.

With equity release, you don’t have to make monthly repayments. That’s because a lifetime mortgage (a type of equity release) is a loan secured against your home and the loan plus compound 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.

There are also no monthly repayments with a home reversion plan, another type of equity release where 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.

Back to Mythbusters

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


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

Want to know more?

Get all the facts about equity release by downloading our free guide to read straight away.

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

Things to consider

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

Here to help when you're ready

Use our free calculator

Find out how much tax-free cash you could release from your home now with our equity release calculator

Speak to an adviser

Book an appointment with a specialist equity release adviser at a time that's good for you

Assess your options

Our later life mortgage finder helps you consider your options

Your other options

Before deciding on equity release, it's important you're aware of your other options.

Here are some more alternatives that may be more suitable for you:

Equity release costs

Knowing the costs associated with equity release and how to manage them is important.

Here are some helpful guides to give you a better understanding:

ⓘ If another product is more suitable, we'll refer you to a different adviser within Key Group who can 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.

Page last updated: Friday 15 December 2023