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Using equity release for university fees
The Bank of Gran and Grandad is being called on more and more. 
According to our latest research, over one in three grandparents have helped, or plan to help their grandchildren fund their studies at university. 
It’s no surprise, either. In England, Wales and Northern Ireland, universities are able to charge more than £9,000 per year for an undergraduate programme. 
That’s just tuition fees. It doesn’t take into account the cost of living, textbooks, laptops and the ‘occasional’ social evening around campus. 
Of course, there is government funding available for university students. According to, a student living outside of London, but away from home, whose parents each earn the UK-average wage of around £29,000 a year, can expect a maximum maintenance loan – the one which is designed to provide a liveable income – of just under £4,500. 
However, the average rent a student pays a year in university accommodation is more than £5,000. 
As you can see, there is a significant deficit. And according to our latest research, the Bank of Gran and Grandad is being called on to help plug the gap. 

How are they funding it? 

Almost 9 out of 10 grandparents are using their cash savings to help their grandchildren through university, while 9% are sacrificing either their pension pot or home by downsizing to help drum up the cash. 
But could there be another way? A way which allows you to retain ownership of your home while still using its value. Well, yes. 

Another way

Equity release is a way to unlock tax-free cash from your home. There are two main ways you can do it – a lifetime mortgage or a home reversion plan.  If you choose a lifetime mortgage – the most popular form of equity release – you retain full ownership of your property. 
A lifetime mortgage is a loan secured against your home, like a regular mortgage; however, there are typically no monthly repayments for you to make. That’s because the loan, plus roll-up interest, is repaid when the plan comes to an end, which is usually when you, or the last remaining applicant either passes away or enters long-term residential care. 

Equity release for university fees

Depending on how much you’d like to unlock from your home could indicate how you receive your money. 
If, for example, you want to use equity release to cover or contribute towards your grandchild’s university fees, and would like to pay for their accommodation in full, as well as any other sizeable bills, a lump sum lifetime mortgage might be suitable for you. 
Whereas, if you would like to contribute over a longer period time, as in pay their accommodation every year, a drawdown lifetime mortgage could be a better option. 
The main difference between the two being that with a lump sum lifetime mortgage, you receive your tax-free cash all in one go. Whereas with a drawdown, you don’t take all the money at once. Following an initial release, you can then draw on the remaining funds as and when you need them. 
A drawdown is often a good way to lower the overall cost of your equity release plan too, as you only pay interest on the money you release. 

Get to know more about equity release

We understand that equity release may be a little daunting. There’s a lot of inaccurate stigma attached to it from years gone by. Read our equity release mythbusters.
With that in mind, we want to help you. Our free, no-obligation equity release guide will give you all the information you need to know about what it is, how it works, and what it could do for you. 
By reading it, you can decide whether you’d like to know more about equity release.
If you do, one of our expert equity release advisers will take the time to get to know you – either face-to-face in your own home, or over the phone, whichever you prefer – and find out if equity release is right for you. 
Rest assured, if it isn’t, they’ll tell you. 
  • Download your free guide
  • See how equity release could help you by downloading our free no-obligation guide. We’ll also post a copy out to you at no extra cost

Things to consider

  • Equity release will reduce the value of your estate and may affect any means-tested benefits you’re eligible for
  • Equity release plans we recommend have a no negative equity guarantee, which means you’ll never owe more than the value of your home
  • You have to get expert advice before releasing equity; it’s a regulatory requirement. Key’s initial consultation is free with no obligation to proceed. If you decide to go ahead with an equity release plan, our advice fee – usually 1.99% of the amount released, subject to a minimum of £1,499 – is payable only on completion
  • See how much you could release
  • Use our free, no-obligation equity release calculator to see how much you could release from your home to help with university costs

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