20 May 2025
Pros and Cons of Equity Release
Equity release, also known as later life lending is becoming more and more popular.
There were over 15,000 active equity release customers in the last quarter of 2024 totalling £665 million worth of housing which is 161 million more than the same period in 2023 (source: Equity Release Council).
Equity release is a type of mortgage that allows homeowners 55 and over to access money from their property’s equity without having to leave their home. This is done by securing a loan against the house which is usually repaid by selling the property when the borrower passes away or has to move into long-term care.
As with any loan, opting for equity release is a big decision and we’d strongly recommend getting advice from an Equity Release Adviser who is part of the Equity Release Council.
Pros of equity release
- Provides a lump sum tax-free cash for you to use how you wish
- Gives homeowners the option to access their property wealth without selling up
- Assessments on affordability are generally less arduous than typical mortgages
- Able to gift money before death to reduce the value of your property for inheritance purposes
- You can ringfence some of your home’s value to ensure your beneficiaries inherit it
- Sometimes you may not have ongoing monthly repayments
Cons of equity release
- It is a type of loan and interest accrued can build up over the years meaning your beneficiaries inherit less
- The range of equity you can release depends on your age and is from 20% to 60% of your home’s value
- It can be tricky to remortgage or move home once you have chosen equity release
- There may be early repayment charges if you repay the loan sooner than anticipated
- The money released can affect eligibility for some means-tested benefits.
Unlike many other Equity Release Advisers, our experts are also qualified Mortgage Advisers which allows them to discuss every other option of your home finances in an unpressurised environment.
Give us a call today: 016258 507477 or email: team@mortgagerequired.com.
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