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Who’s releasing equity from their home and why are they doing it?

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There are several reasons why you might want to take out equity release. 
 
Gifting a living inheritance, paying off outstanding debts, financing home care, or enjoying a once-in-a-lifetime holiday. All of these might be possible through equity release1
 
But who are these people doing this and securing a more financially stable future for themselves?
 
Who and why?
 
As in life, it takes all sorts. Across Scotland, Wales and Northern Ireland, and up and down England there are many over-55s using their biggest asset to fund their later lives. Liz Bolt being one of them. 
 
“I decided I would move to Scotland,” she says. “It was a great move. I love it here. The views are spectacular and I enjoy the village life. 
 
“I deliberately bought a big house so my children and grandchildren could come and stay over… but I was struggling to maintain such a big house.
 
“Equity release has given me peace of mind. You really can’t put a price on that.” 
 
The most common, however, are couples, aged around 72, who last year were able to release, on average, £86,0001&2.
 
That’s not to say it’s only joint applicants who are looking for financial peace of mind as they approach or enjoy retirement. More than one third of Key’s customers are single, which is an increase from this time last year1.
 
And they, like others who have taken out equity release, were able to call on the value of their home when they needed it most. Veronica Harrison’s story being a perfect example. 
 
Having fallen ill shortly before her 60thbirthday, Veronica was forced to cut her working hours and started to run up debts. Her interest-only mortgage was also approaching its end.
 
“I started to worry. It was terrible. I’d had quite a nest egg before this happened.
 
“My brother recommended equity release, so I called Key. They were brilliant. The adviser went through every little detail and made sure I understood it all.”
 
Veronica paid off her existing mortgage, cleared her existing debt and is now getting back on her feet – physically and financially.
 
“It was such a relief,” she says. “Now I can live comfortably, without constant worry.”
 
Still own your own home
 
More than 99% retained full ownership of their property after taking out equity release. That’s because they chose a lifetime mortgage – the most common form of equity release – instead of a home reversion plan1
 
lifetime mortgage is a loan secured against your property, meaning you can stay in the home you love while retaining full ownership. Typically, there’s no monthly repayments as the loan, plus compound interest, is paid back when your plan comes to an end. 
 
A home reversion plan, meanwhile, is where you sell all or part of your home to a reversion company. Although you can remain in your own home until you either pass away or go into long-term care, you no longer own the property. Only 0.1% of equity release plans taken out in 2018 were home reversions1.
 
It’s easy to see how much tax-free cash you could release from your home. Just use our simple online equity release calculator to take your first step towards securing a more comfortable and enjoyable future. 
 
What should you consider before taking out equity release?
 
Our independent, specialist equity release advisers compare products from the whole market to find the most suitable equity release plan for you. They’ll discuss all your available options and explain that taking an equity release plan will reduce the value of your estate and may affect any means-tested benefits you’re eligible for.
 
All equity release plans we recommend have a no negative equity guarantee. That means you’ll never owe more than the value of your home.
 
You should always think carefully before securing a loan against 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.

1Key’s 2018 FY Market Monitor data
2Key’s 2018 FY Market Monitor

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