What is Equity Release
With the continuous rise in house prices, many homeowners in the UK find a significant portion of their wealth tied up in their property. The value of your home, minus any outstanding mortgage or secured loan, is known as your “equity.” Our equity release plans empower homeowners aged 55 and above to unlock this equity and convert it into cash. You can choose to receive a lump sum, smaller amounts over a specific period, or a combination of both.
The most popular type of equity release is the Lifetime Mortgage. Unlike traditional residential mortgages, there are typically no monthly repayments involved. Instead, the interest is added to the initial loan, which gradually increases over time. You maintain ownership of your property, and the outstanding debt is repaid only upon your passing or if you permanently move into a care home. This means you can continue to benefit from any appreciation in your property’s value throughout your lifetime.
Is Equity Release Suitable for Me?
The funds released through equity release are tax-free and can be utilised for various purposes, such as:
- Supplementing your retirement income
- Consolidating existing debts and reducing monthly expenses
- Providing financial gifts to your children
- Mitigating potential Inheritance Tax liabilities
Determining whether a lifetime mortgage is the right choice for you depends on your individual circumstances. It is crucial to seek professional financial advice before making any decisions. At 3D, we prioritise our clients and their needs, always recommending the most suitable option for you and your family.
Equity Release FAQs
Equity release allows homeowners aged 55 and above to access the value (equity) tied up in their property without the need to sell or move out. This can be done through a lifetime mortgage or a home reversion plan.
Yes, equity release is regulated by the Financial Conduct Authority (FCA) to ensure consumer protection. We work with reputable providers and always recommend products that adhere to strict industry standards.
The two main types of equity release plans are lifetime mortgages, where a loan is secured against the property, and home reversion plans, where a portion or all of the property is sold to a provider in exchange for a lump sum or regular payments.
The amount you can release depends on factors such as your age, property value, and health. Our advisors will conduct a thorough assessment to determine the maximum amount available to you.
Yes, with a lifetime mortgage, you retain full ownership of your home. With a home reversion plan, you continue to live in your home rent-free until you pass away or move into long-term care.
With a lifetime mortgage, you can ring-fence a portion of your property’s value as an inheritance guarantee. Home reversion plans involve selling a portion of your property, which will affect the amount you can leave as an inheritance.
Yes, some equity release plans are portable, allowing you to move to another suitable property. However, it’s essential to check the terms and conditions of your plan to ensure its flexibility.
Releasing equity from your home may impact your eligibility for means-tested benefits. Our advisors will assess your specific situation and provide guidance to help you make informed decisions.
Equity release can be a suitable option for those looking to unlock cash tied up in their property, but it’s not suitable for everyone. We’ll conduct a thorough financial review to determine if equity release aligns with your needs and objectives.
The costs may include arrangement fees, valuation fees, legal fees, and an adviser’s fee. We’ll provide a transparent breakdown of all costs involved in the equity release process.
The time frame can vary, but it typically takes around 6-8 weeks from the initial application to receiving the funds. Our team will guide you through each step to ensure a smooth and efficient process.
With a lifetime mortgage, the property will be sold, and the proceeds will be used to repay the outstanding loan and interest. With a home reversion plan, the property is sold, and the provider receives their agreed share.
Disclaimer: The information provided in our FAQ section is accurate as of the date of issue and is intended to offer general guidance on various financial topics. However, please note that financial regulations and legislation can change over time, potentially affecting the validity of the information. We recommend verifying the information with current sources and consulting our team of experienced IFAs or other qualified professionals before making any financial decisions based on the content of our FAQ section. Our firm is not liable for any actions taken as a result of relying on the information provided on our website
“As an existing client of 3D Financial Planning, I was confident that they would be able to advise me on equity release. As ever, they based their advice on my individual circumstances and recommended the most suitable product that would matched my requirements. They made sure the whole process was as smooth as possible and continued to follow up the application after it had been submitted so they could keep me well informed of the progress. The end result was very satisfactory considering this was dealt with during the COVID-19 pandemic.”
Derek & Lynda Learwood
“With a lot of our wealth tied up in our property, we saw it as a great opportunity to access the equity in our home and distribute some of it to the grandchildren (as well as buy that electric car) so we were able to see them benefit from an early inheritance. 3D Planning expertly handled the process from start to finish. First sourcing the best deal available and then providing an invaluable link between the two legal teams. This was especially helpful when the process jammed due to staff changes at one of the legal teams. We had 3 goals in our search for an equity release mortgage, interest rate (low and fixed for eternity), the amount we wished to release and the early repayment penalty. Any one of these 3 could have terminated the process but 3D managed to satisfy all three of our requirements.”
Richard & Bonny Quin-Stanley
“Our main objective was to raise funds which would allow us to carry out some much-needed home improvements, and also help supplement our retirement income. Raising the funds via an equity release was tax-efficient way of achieving this. 3D have always put our interests first and have given sound advice on my pension and therefore we had little worry that they would be able to provide high quality advice for our equity release. We have achieved the desired outcome and we would highly recommend their services.”