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What can I use equity release for?

Category:
Your Life
Tuesday 25 August 2020
Funding a conservatory or a loft conversion, finally paying off that existing credit card balance, helping a loved one onto the property ladder, buying the car of your dreams, even fulfilling a lifetime dream of ballroom dancing around the world – when it comes to how our customers use their equity release funds, we’ve heard it all.

Whether you’re looking into equity release to help make your retirement more comfortable or have bigger dreams for your funds, it’s your money and can be used for a range of wants and needs.
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We asked our customers in the first half of 2020 how they planned to use their equity release money.
 
Home and garden improvements – 59%
Over half of our customers decided to use some or all of the money they released to improve their homes and gardens.

While renovating your home not only makes it nicer to live in, it could also add thousands to the value of your property. Adding a conservatory or extension, a new bathroom or kitchen, or converting the loft – it could increase the value of your property.

‘Future proofing’ the home is also popular. Adding a stair lift, walk in shower or even landscaping the garden to create a low maintenance space can all ensure you can stay in your home for longer.
 
Existing debt – 29%
Meeting only the minimum monthly payments on your existing debt can feel like you’re stuck in an endless cycle and nothing quite eats into retirement savings like monthly repayments on a high interest credit card.

More people are now retiring in debt and it can often disrupt what should be an enjoyable time in life – not only financially, but emotionally too.  So it’s understandable that almost a third of our customers use some or all of their equity release funds to pay off any existing debt from credit cards to loans.
 
Travel – 27%
Finally, in retirement you have the time to go where you want. Whether that’s fulfilling a lifetime dream to see the Northern Lights or to take more trips to see your family. Wanting it isn’t always enough though, as it can add up financially.
 
Travel and trips of a lifetime have always been popular reasons why people take out equity release and this year so far 27% of customers have done just that. You’ve worked hard all your life and paid into your home, so when retirement approaches, it’s great to know your home could pay you back.
 
Existing mortgage – 19%
It’s worth pointing out that if you have an outstanding mortgage or any other debt secured against your home, you must pay this off first with the funds you release. 19% of our customers did just this, using some or all of their funds to rid themselves of a monthly mortgage payment giving them peace of mind for the future.
 
Gifting to loved ones - 24%
With more people living longer, it’s becoming increasingly common to help your loved ones sooner rather than later, providing an inheritance while you are around to see them enjoy it.

Almost a quarter of our customers helped loved ones with a financial gift for a range of uses such as helping them step up onto the property ladder, contributing to university fees, paying for a big life event such as a wedding or even getting a grandchild onto the road with their first car.

Calculate how much you could release
 
What would you do with the money released?
Equity release isn’t a single-use financial product – many of our customers use the funds released for more than one reason, including helping with regular bills. It has always been vitally important that you balance both your short-term and longer term financial needs but now, more than ever, the need to get good quality advice is crucial. 

Equity release lasts a lifetime and so it is important not to rush into a long-term financial decision just to service a short-term need. 

Getting advice
Our fully-qualified, specialist equity release advisers take the time to understand your needs, ensuring they find and recommend the right plan for you. They’ll talk through the options available and explain that equity release will reduce the value of your estate and may affect any means-tested benefits you’re eligible for.

It’s a regulatory requirement to get specialist advice before releasing tax-free cash from your home. We understand that when you’re considering equity release there’s a lot to think about, which is why there's no pressure to proceed. All of our equity release advice relates to our range of Key-branded products and is completely free of charge, so you can find out if it’s right for you without it costing you a penny.

Key Equity Release offer lifetime mortgages only, which is a loan secured against your home. You should always think carefully before securing a loan against your home.
 
With a lifetime mortgage, you’ll still own your home and there are typically no monthly repayments. That’s because the loan, plus roll up interest is repaid when your plan comes to an end. Usually, that’s when you, or the last remaining applicant, either passes away or enters long-term residential care. 
 
All of our equity release plans meet the Equity Release Council standards and come with the no negative equity guarantee. This means you’ll never owe more than the value of your home and any debt you accrue through equity release will never be passed on to your family.

 
Page last updated: Tuesday 01 September 2020