Clear existing debt

Debt in retirement

Having large amounts of debt  can severely strain your savings once you retire and can be difficult to pay off.

Even the best-laid retirement plans can be spoiled by existing debt. So it’s good to start your non-work life on a strong financial footing.

While incomes traditionally fall at this time of life, finding the funds to manage monthly payments, as well as doing all the things you want to in later life can be a struggle.
 

Can you use equity release to pay off existing debt?

Yes you can, there is no minimum or maximum level of debt you need to have to look at equity release as an option.

However, it’s more likely to be suitable for you if you have debts that you cannot afford to pay off using your regular income.

By releasing some equity from your home using a lifetime mortgage, which is a type of equity release, you can use it to pay off debts such as an existing mortgage, balance on credit cards and loans, car finance payments or other loans.
 

Freeing up your income

With a lifetime mortgage, there are usually no monthly repayments to make. This is because 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.

By paying off your debt with this type of plan, it provides you with the option to not make monthly repayments on your existing debt and free up your day-to-day cash. Although you should always think carefully before securing a loan against your home to repay existing debt.

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

Is equity release right for you?

Equity release is a way for homeowners aged 55 and over with a property worth £70,000+ to release some of the tax-free cash from their property to spend on a variety of uses. However, it’s not right for everyone.  

At Key, our specialist equity release advisers will discuss your needs and ensure you consider all your financial options, and their expert advice is available over the phone, via video appointment or face-to-face, whichever is right for you.
 
And, if equity release isn’t right for you, we’ll tell you.