Lifetime Mortgages
The most common form of equity release. You retain ownership of your home and the loan is repaid from the sale proceeds when you die or move into care.
Equity Release
Your home might be your biggest asset, but the money is tied up in bricks and mortar. Equity release helps you access some of that wealth whilst continuing to live in your home.
This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.
A lifetime mortgage will reduce the value of your estate and may affect your entitlement to state benefits.
Equity release may not be suitable for everyone and there may be more suitable ways of raising funds.
Understanding equity release
Equity release allows homeowners aged 55 and over to access the wealth tied up in their property without having to move. You remain the owner of your home and can continue living there, whilst accessing a lump sum or regular income from your property's value.
Important Consideration
- You must be aged 55 or over to qualify for most equity release products
- The loan is repaid when you die or move into permanent care
- Interest compounds over time, reducing the value left for inheritance
- May affect eligibility for means-tested benefits
- Your home must be maintained in good condition
- Consider alternatives like downsizing before choosing equity release
Your interest rate stays the same throughout the plan. This provides certainty about how much the debt will grow, making it easier to plan for the future value of your estate.
Your interest rate can vary but has a guaranteed maximum limit it will never exceed. This offers some protection against rising rates while potentially benefiting from falls.
You access funds in stages rather than taking the full amount upfront. Interest only applies to money you've actually withdrawn, helping control debt growth.
Higher loan amounts are available if you have certain health conditions or lifestyle factors. Medical underwriting can significantly increase the cash you can release.
More about equity release mortgages
Drawdown Plans
Release money in stages rather than one lump sum. This reduces the amount of interest that builds up as you only pay interest on the money you’ve actually taken.
Home Reversion Plans
You sell part or all of your home to a reversion company in exchange for a lump sum or regular income, whilst retaining the right to live there rent-free. Sterling Street do not provide advice on Home Revisio plans but we can introduce you to Key Partnerships who will be able to provide advice to you.
Enhanced Plans
If you have health conditions or lifestyle factors that may reduce life expectancy, enhanced plans may offer better rates or higher release amounts.
A lifetime mortgage is not suitable for everyone and may affect your entitlement to means tested benefits, so it is important to seek financial advice before taking any action. If you are considering releasing equity from your home, you should consider all options available before equity release.
The interest that may be accrued over the long term with a Lifetime Mortgage, may mean it is not the cheapest solution. As interest is charged on both the original loan and the interest that has been added, the amount you owe will increase over time, reducing the equity left in your home and the value of any inheritance, potentially to nothing.
Although the final decision is yours, you are encouraged to discuss your plans with your family and beneficiaries, as a Lifetime Mortgage could have an impact on any potential inheritance. We would also encourage you to invite them to join any meetings with your Financial Adviser so they can ask questions and join in the decision, as we believe it is better to discuss your decision with them before you go ahead.
How we help
We understand that financial decisions feel heavy because they affect everything that matters to you. Our job is to make them lighter, clearer and easier.
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