Is equity release a good idea?

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, compound interest means the amount you owe can grow quickly over time. This 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.

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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.

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Yes, you can move to a new home with an equity release plan, but it depends on your plan’s terms. The lifetime mortgages we recommend 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.

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Equity release plans include several safeguards for you and your home. Key is a proud member of the Equity Release Council.

Equity release can be a suitable option for homeowners looking to access some of the funds tied up in their property. However, it's important to consider all your options, as there may be alternatives, with a lower cost of borrowing, that are better suited to your needs.

Selling your home and downsizing could provide a similar financial boost while avoiding the long-term commitments of equity release. It could also help you leave more inheritance for your loved ones and avoid interest building up over time.

Another option may be a traditional loan or mortgage, although these usually require regular monthly repayments and you'll need to meet the lender's eligibility criteria.

Each option can have a significant impact on your finances and future plans, so it's important to discuss your individual circumstances with an equity release adviser who will consider all your alternatives. At Key, if another product is more suitable for you, we'll refer you to the right specialist adviser within Key Group who can help.

Choosing between equity release and a remortgage depends on your individual circumstances and financial goals.

Both options can help you access money from the value of your home, but they work in different ways and come with different benefits and drawbacks. Equity release may suit homeowners aged 55 or over who want to access cash without making monthly repayments.

However, with a lifetime mortgage, there are typically no monthly repayments. Instead, interest is added to the loan and the total amount is usually repaid from the sale of the property when the last remaining applicant dies or moves into long-term care. This means the amount owed can build up over time, reducing the value of your estate and the inheritance you leave behind.

A remortgage may be more suitable if you're able to make regular monthly repayments and are looking to move to a more favourable mortgage deal. It will usually involve an affordability assessment and is likely to have a shorter loan term and a lower overall cost of borrowing. However, your home may be repossessed if you do not keep up repayments.

Both options can have a significant impact on your long-term finances, so it's important to seek professional advice that's tailored to your individual circumstances before making a decision.