Equity Release FAQ's

Equity Release FAQ's

Equity Release Frequently Asked Questions

Every day our advisers are responding to lots of exciting but essential questions regarding equity release. We’ve taken the pleasure to compile a comprehensive list of the most frequently asked questions concerning equity release that we’d be glad to share with you:

Is It A Good Idea To Release Equity?

Equity release plans are fantastic. You get the financial freedom you need, and you can spend the cash you release to do whatsoever you’ve always wanted to do. You also don’t have to make any monthly repayments since you repay the loan when you die or move into permanent care.

Nonetheless, if you want to leave an inheritance, it might not be the best option for you. If you’ve looked at other alternatives and still feel that it’s your best choice, then you must consider ring-fencing some of the value of your estate.

Can I Take Out an Equity Release on a Property with a Trust Registered to It?

You cannot! Your lender would have to agree to leave the trust untouched (currently there is a void of any knowledge regarding lenders who can). You must first wind up the trust before you complete the equity release.

And here's why:

The conditions of a trust underline that all equity in a trust must go to its beneficiaries. The structure of equity release loans makes it necessary that lenders require security from a property free from preventatives like trusts and other loans secured against it before you can complete the process.

Think of it...

Perhaps your property already has a trust registered against it. We recommend you seek independent and professional legal consultancy before you proceed into arranging for your trust to wind up. The beneficiaries of the trust also require independent legal advice from you.

Can My Equity Release Broker Change the Conditions at a Later Date?

Every equity release loan is a long-term contract, but your provider might need to review some aspects as time goes.


Before you take out an equity release, your equity release provider must clearly explain to you that all the underlying circumstances applying at present might not stay the same a few years later. Thus, it would help if you remain aware that you will have a scheduled meeting to discuss and understand the terms as they revise them.

How Does Equity Release Work

Consider this:

There are three particular areas where lenders may need to keep reviewing: these are portability of your equity release, the ability to make keep making withdrawals in the future, and your eligibility to make capital repayments.

Portability: According to the Equity Release Council rules, you must be able to “port” (transfer) your equity release plan onto another eligible property if you wish to move. You ensure that the property in question still satisfies your provider as a representation of the security for your loan.

What does it mean for you?

Because equity release providers always keep their borrowing requirements under review, a property that’s accepted now, might not forever remain satisfactory as standards change. Thus, it’s best if you discussed the acceptability of your alternative property with your provider before you commit to buying it.

Otherwise, you will find your options being limited and may have to repay your loan through early repayment penalties.

Future Cash Withdrawals and Advances: Some equity release providers may permit you to make other withdrawals or cash advances as a flexible ‘drawdown’ Lifetime Mortgage. But that is at their discretion, which means future access to more sums of money does not remain certain for you.

Perhaps your equity release provider may deny your request to draw more sums of cash, and you would like to switch to an alternative provider to access more money, you must first repay your initial mortgage.

Capital Repayments: Equity release providers are making options for clients to make ad hoc capital repayments a prevalent feature, especially of some rolled-up interest with Lifetime Mortgages.

Here's a thing...

Your provider will decide whether they can accept payments of this manner, and the frequency and size each payment must be as you make it. You must discuss with your equity release advisers if you would like to get a plan where you can make capital repayments.

Simply put:

You may also wish to gain more knowledge about whether your provider reserves their right to exclude any options of capital repayments. If your provider restricts access to Drawdown Cash Reserves during a determined period, and after the receipt of a capital repayment; also, how capital repayments will apply to your account.

What are the Criteria for Equity Release?

For you to qualify for equity release you must:

Be at least 55

Own property valued at £70,000 and above

I am 50 years. Can I Take an Equity Release Plan?

If you want to release a cash lump sum from your estate and are under the age of 55, you can’t qualify for a regular equity release plan. However, you can always seek out expert advice to find alternative solutions.

How Old Must I Be to Qualify for a Lifetime Mortgage?

You must be 55 years, and above, to become a qualified applicant for a Lifetime Mortgage. If you want to take out an equity release loan with your partner, the youngest borrower must be at least 55 years old.

If you want to take out a Home Reversion Plan; you must both be at least 60.

How Does Equity Release Work

How Long Will It Take to Access to the Equity Release Funds?

The timescale on which the equity release process completes will vary depending on your mortgage provider. However, it’s usually between 8-12 weeks from the date you deliver your application to your provider up to the date your solicitor receives your funds.

Can I Release Equity From My Home Without Paying My Mortgage Off?

First, you will need to pay off your mortgage in full. You can repay your mortgage by either using some proceeds from your equity release or any other available funds. Then you can use what remains of the money for your pleasure.

How Much Equity Can I Release?

Your equity release provider will commit a surveyor to conduct a professional valuation of your property, and then they will determine how much equity you can release.

To add to that...

The amount of equity you can release also depends on your age and that of your partner (considering that it’s a joint application), even your property’s initial value. Some equity release providers will also offer more considerable sums of cash to people with particular present or historical medical conditions.

What Is the Minimum Value for Properties on Which Equity Release Is Available?

Equity release providers will barely accept any property that has value less than £70,000.

How Much Does it Cost to Release Equity?

It typically depends on the equity release provider you pick.

However, equity release costs include application fees like financial advice fees, lender’s costs, realty appraisal fees, and professional costs. These typically range from £900 to about £2000. There’s also the interest charged on loan.

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