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Our equity release plans

Whether you’re looking for competitive interest rates or flexible features, there could be a Key equity release plan for you.

Am I eligible?

You could be eligible if you're:
  • A UK homeowner aged 55+
  • With a property worth £70,000+
Calculate now

What are the different types of equity release plans?

There are two types of equity release: lifetime mortgages, and home reversions. Find out more about the different types of equity release and how equity release works. It's worth noting that equity release is a complex product with long lasting effects and may not be right for everybody.

Lifetime mortgage

A loan secured against your home that lets you access some of the tax-free funds tied up in the value of your home while still retaining full ownership. The lifetime mortgage is subject to compound interest, meaning the amount you owe can grow quickly. You need to be 55 or over to qualify.

Home reversion

Where you sell all or part of your home to a reversion company for less than market value in exchange for a cash lump sum, with no interest to pay on the money released, and no monthly payments to make.

When the plan comes to an end, the home reversion provider takes its percentage share of the sale proceeds. If 100% of the property hasn't been sold the remainder will go to your beneficiaries. You will lose legal ownership of your property and need to be 65 or over to qualify.

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


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How does a lifetime mortgage work?

Equity can be released in one of two ways via a lifetime mortgage. If you want the money all at once, then you could opt for a lump sum lifetime mortgage. If you want to take out an initial amount then release further funds as and when you need to, you might choose a drawdown lifetime mortgage.

Retain home ownership

  • With a lifetime mortgage, you’ll still own your own home. And the plan typically won’t come to an end until you, or the last remaining applicant, either passes away or enters long-term care. 

No monthly repayments

  • There are typically no monthly repayments to make, as the loan, plus roll up interest, is repaid when the plan comes to an end. If you want to reduce the long-term cost of your plan, you can make repayments of up to 10%-12% without any early repayment charges.

Choose how you get your funds

  • You can release funds from your home in a one off lump sum or a series of smaller amounts following an initial release, which is known as a drawdown lifetime mortgage.

✓ Lower interest rates
Lump sum lifetime mortgages sometimes come with a lower rate of interest compared to a drawdown lifetime mortgage, which can help reduce your total cost of borrowing.

✓ Interest rates don’t change
When you release the funds as a single lump sum, the money released is subject to the fixed interest rate at the time.

ⓘ May be more expensive
As compound interest will be rolled up on the money you’ve released, you will end up owing more if you take all your available cash in one go. 

ⓘ Limited ability to release further funds
With a lump sum lifetime mortgage, you can’t release further funds unless you apply for a further advance. This is subject to the lender’s criteria, your age and your property’s value at the time of application. This also requires advice and is subject to fees.

✓ Release funds when needed
A drawdown lifetime mortgage offers more freedom than a lump sum plan, allowing you to release money when you need it.

✓ Save on interest
A drawdown lifetime mortgage also allows you to potentially save a considerable amount in interest over the lifetime of your plan, as the interest only accrues on the money you’ve released

ⓘ Your drawdown facility isn't guaranteed
Your lender may have the option to withdraw your drawdown facility.

ⓘ You don't know what interest rates will be like in the future
If you choose to make a drawdown, the funds will be subject to the prevailing, fixed interest rate at the time

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What are the benefits and drawbacks of a lifetime mortgage?

If you're considering equity release, it's important you understand the product in detail. Here's some useful things to think about. 

Equity release 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

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

Your other options

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

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

Retirement interest-only mortgage
Retirement repayment mortgage
Or see if equity release is right for you

Equity release costs

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

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

Compound interest explained
Lump sum vs drawdown lifetime mortgage
What does equity release cost?

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What are the typical lifetime mortgage interest rates?

Lifetime mortgage interest rates vary depending on the plan you take out and your circumstances. Our lifetime mortgage calculator will give you an illustrative rate based on the details you put in.

With a lifetime mortgage, the interest accrues, then rolls up and is added to the loan. This is also known as compound interest. The interest rate you get will be specific to your circumstances and is fixed for the life of the loan.

Representative example

5.98% AER

Lowest rate with Key

6.96% AER

Rate most Key customers received, or less

7.26% APR

Overall cost for comparison

All rates correct as of 3rd December 2023. This is based on customer data from the last 60 days, apart from Key's lowest rate. Interest rate received and plan features are subject to eligibility. Ask for a personal illustration.

Interest rates explained

  • AER stands for Annual Equivalent Rate. It shows what the interest rate would be if the interest was compounded each year.

  • APR stands for Annual Percentage Rate. It's the cost you pay each year to borrow money, including fees, expressed as a percentage. 


Our equity release calculator will give you an illustrative rate based on the details you put in.


Calculate now

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Personalising your lifetime mortgage

We understand that everyone's needs are different. That's why we can personalise your lifetime mortgage to make sure it's right for you.

You can make optional repayments

There are no monthly payments to make. If you want to reduce the long-term cost of your plan, you can make repayments of up to 10%-12% without any early repayment charges.

Downsizing protection

Downsizing protection allows you to move to a new home and repay the lifetime mortgage in full without any early repayment charges if your new property doesn’t meet the lender’s criteria. This comes into effect after you’ve had the lifetime mortgage for five years.

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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+ Trustpilot reviews, making us the UK's most trusted equity-release specialist

BestEquityReleaseAdviser2022-(1).png

Highly experienced

We have over 25 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.

Trustpilot
Trustpilot

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

  • 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
  • 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
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Next steps to release equity from your home

To help you understand the process, we’ve put together these  steps to highlight what your journey to equity release could be like:

I want to see how much I can release

Use our free equity release calculator to instantly see how much tax-free cash you could unlock from your property

Calculate now

I want to speak to an equity release expert

Fill in our short form and one of our dedicated team will give you a call to answer any questions you may have

Arrange now

I want to know more about equity release

Download our free equity release guide to find out more about how equity release could help change your later life

Free guide
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Page last updated: Wednesday 30 August 2023