10 alternatives to equity release

 

10 Alternatives To Equity Release In The UK | March 2024

Looking at alternatives to equity release is crucial for homeowners looking to make the most of their financial options in later life. 

The article will help you do the following:

  1. Understand the significance of considering alternatives to equity release.
  2. Learn about various options available beyond equity release and their key advantages.
  3. Discover the main reasons why one might consider alternatives to traditional equity release schemes.
  4. Grasp the benefits of being informed about these alternatives in terms of financial planning and security.
  5. Encourage actions to assess personal financial situations and explore suitable alternatives based on the information provided.

Key Takeaways & Learnings From This Page on the alternatives to equity release

Here are 7 key takeaways from this article:

  1. Downsizing to a smaller property can provide financial benefits, but it also involves emotional and financial considerations, including estate agent fees and moving costs.
  2. Utilising credit cards for short-term needs might be beneficial due to low-interest deals, but it requires careful management to avoid long-term debt.
  3. Retirement Interest Only mortgages allow for payment of interest only, with the principal due upon sale of the property, offering a potential reduction in monthly outgoings.
  4. Remortgaging can offer lower monthly payments and access to equity, but it’s essential to evaluate costs and terms to ensure it’s beneficial.
  5. Personal loans can be a more immediate solution but may carry higher interest rates than other options.
  6. Using savings and investments can avoid accruing debt, but it’s crucial to consider the impact on future financial stability.
  7. Renting out a room or claiming benefits and grants are viable alternatives that can supplement income without impacting home equity.

Topics that you will find covered on this page

10 Alternatives To Equity Release In The UK

  • Downsizing
  • Using credit cards
  • A Retirement Interest-Only mortgage
  • Remortgaging
  • Borrowing money
  • Using your savings and investments
  • Renting out rooms
  • Financial support from friends and family
  • Claiming grants and benefits
  • Budgeting

Reasons to Consider Equity Release Alternatives

There are several reasons to consider equity release alternatives. One of the main ones is the high interest rates associated with equity release options, which could eventually cause you to owe more money than your property is worth.

Another reason is that the equity release options, such as a lifetime mortgage, can impact your eligibility for means-tested benefits. This is because of the likelihood that the money you release could be seen as capital or savings.

Releasing equity can further impact your potential inheritance tax liability and capital gains tax position, depending on whether you later sell your property. Therefore, before choosing equity release, it’s imperative to take these “tax implications” into perspective.

The value of your estate and the amount of inheritance you can leave behind may decrease due to equity release. Therefore, considering alternatives to equity release can be a wise decision for some homeowners.

The Equity Release Council and the Financial Conduct Authority oversee equity release providers in the UK.,

Alternatives to Equity Release

If you’re looking for ways to boost your income later in life, equity release products are becoming an increasingly popular option. But before you go ahead with this option, it is worth considering the pros and cons described above and exploring the differences between the alternatives.

Here are 10 other forms of assistance you may want to consider:

1 – Downsizing

When the kids have grown up and moved out, you might have more space in your home than you need. Selling your home and moving to a smaller, less expensive place of residence can generate a lump sum of money.

While downsizing is cheaper and more flexible than other methods, it has disadvantages. If home prices are falling at the time you are selling your home, you might end up with less money than you hoped. You will also need to pay an estate agent.

Additionally, it could take some time to find a buyer and a good place to spend your golden years. The fact is that downsizing can be costly and have substantial emotional impacts.

These include moving costs, estate agent’s fees, legal fees, stamp duty, buying new furniture, redecorating to suit your tastes, leaving your long-standing family home and losing support from family and friends in the community.

a) Financial Implications of Downsizing

Downsizing can reduce living costs and provide a lump sum from the sale proceeds. 

You should consider estate agent fees, legal costs, and potential stamp duty when purchasing your new home. Budget for moving expenses and any necessary home improvements in your new property.

b) Latest Market Trends in Downsizing

Recent data from the UK housing market indicates a growing trend towards downsizing, especially among retirees looking to free up equity.

According to a 2024 article by the Daily Mail, approximately 15% of homeowners over the age of 55 are considering downsizing in the next two years.

c) Financial and Emotional Considerations

Downsizing can significantly reduce living expenses and provide a substantial equity release, offering financial relief. The process can be emotionally challenging, as it often involves leaving a family home filled with memories. The key is balancing the financial benefits against potential emotional costs, ensuring the decision supports your overall well-being.

d) Steps to Downsizing

  • Assess your current and future space needs.
  • Research the property market for suitable smaller homes.
  • Consult with a real estate agent to list your current home.
  • Plan the move, including sorting and downsizing possessions.

2 – Credit Cards

A credit card may be a great option if you need a relatively small amount quickly. Low interest rates and a battle for clients between credit card providers mean great deals are available on the market.

For example, in the past the Lloyd Bank Platinum Low Rate credit card offered an interest rate as low as 6.45% depending on your circumstances. Additionally, it has an annual fee of £0, and when you make a balance transfer within the first 90 days of opening an account, you get a no-fee deal.

The best option for credit cards is to go for those with a low-interest rate; however, this option is more suitable for borrowing smaller amounts of money.

a) Managing Credit Card Usage

When using credit cards as a short-term financial solution, aim for cards with low-interest rates or introductory offers. You should always plan a repayment strategy to avoid accumulating debt that could impact your financial stability.

b) Current Credit Card Interest Rates

As of 2024, the average interest rate on credit cards in the UK has slightly decreased to 19.6%, down from 20.3% in 2023, offering a potentially more affordable short-term borrowing option for homeowners (Source – UK Finance).

c) Financial Caution and Emotional Stress

Credit cards offer a quick financial solution but come with high-interest rates that can lead to long-term debt. 

This financial strain can also cause emotional stress, particularly if debt levels become unmanageable. It’s crucial to consider both the immediate convenience and the potential for future financial and emotional strain.

d) Process for Using Credit Cards

  • Compare credit card offers to find low interest rates.
  • Apply for the chosen credit card.
  • Strategically use the card for necessary expenses.
  • Set up a repayment plan to avoid accumulating debt.
alternative to equity release

3 – Retirement Interest Only Mortgage (RIO)

Retirement interest only mortgages (RIO mortgages) are a newer type of equity release product that could be a suitable alternative to equity release. With a retirement interest-only (RIO) mortgage, you only pay the interest each month, with the capital being repaid when you sell your home. RIO mortgages allow homeowners to borrow into retirement.

Therefore, like a standard interest-only mortgage, you only make monthly interest payments during the mortgage term.

When you sell your house, enter long-term care, or pass away, the loan is paid back in full.

RIO mortgages can offer lower monthly payments than regular ones, as you’re only paying the interest. Therefore, you can save money every month and potentially improve your retirement income.

However, like all financial products, RIO mortgages come with risks. For example, if your property value falls, you can end up paying more than the value of your home.

Therefore, seeking professional equity release advice from an independent financial advisor or mortgage broker is always beneficial before deciding on a RIO mortgage.

a) Understanding RIO Mortgage Costs

A RIO mortgage requires you to pay monthly interest, which can be a manageable way to maintain cash flow. 

However, the loan amount will be repaid from your estate, potentially reducing the inheritance you can leave.

b) RIO Mortgage Statistics

The increase of Retirement Interest-Only mortgages has seen a significant increase, with a 25% rise in applications in the last year alone, highlighting their growing popularity as a viable alternative to equity release 

c) Long-term Financial Planning and Peace of Mind

A RIO mortgage provides a way to manage cash flow without immediately dipping into the home’s equity. Financially, it requires careful planning to ensure the interest payments are sustainable. Emotionally, it can offer peace of mind, knowing you can remain in your home for life, though it may also raise concerns about the impact on your estate’s value.

d) Applying for a RIO Mortgage

  • Consult with a mortgage advisor to discuss eligibility.
  • Compare RIO mortgage offers from different lenders.
  • Complete the application process with your chosen lender.
  • Regularly review your mortgage to ensure it remains competitive.

4 – Remortgaging

Another option is to change mortgage providers before completion of your current mortgage term. Remortgaging with a lower interest rate and better terms can reduce your monthly payments, freeing up cash for other expenses such as paying off debts or home improvements.

It’s also a great way to release some cash built up in your estate.

Before you start shopping for mortgage rates and lenders, decide on what product you want – for example, a fixed rate, variable rate or tracker. This will enable you to find the best offer.

Then, you should speak to a lender directly and use a comparison website or the best-buy tables in the financial pages of newspapers to find the best deals. If you don’t want to do the legwork, a mortgage broker can be valuable.

This is also a good alternative to selling your house fast.

a) Evaluating Remortgaging Costs

Remortgaging can offer lower interest rates and better terms. Assess any early repayment charges on your current mortgage and consider arrangement fees for the new mortgage to ensure it is cost-effective.

b) Remortgaging Rates and Trends

In 2024, remortgaging rates have become more competitive again, with the average fixed-rate mortgage dropping to around 5%. This shift makes remortgaging a more attractive option for homeowners looking to release equity or secure better terms.

c) Economic Benefits v Emotional Security

Remortgaging can offer lower monthly payments and access to equity, providing financial relief. However, securing a new mortgage later in life can also bring emotional concerns, such as the fear of being unable to meet payments or the stress of going through the mortgage process again.

d) Steps to Remortgage Your Property

  • Evaluate your financial situation and property equity.
  • Research the market for the best remortgaging deals.
  • Contact lenders or a mortgage broker to apply.
  • Complete the legal and valuation processes.

5 – Borrow Money

Even if you’re retired, you can take out a personal loan against your residence. Borrowing via a personal loan will help you avoid the high fees associated with equity release plans.

Additionally, loans can be arranged for short terms, as and when you need money, unlike equity release , which is a lifetime commitment.

This solution has some downsides, though. Interest rates on personal loans are more expensive than mortgages. If you are unable keep up with the monthly payments, you risk having your property repossessed. Therefore, before opting for this option, ensure you have enough income to repay. Speak to an expert adviser, who can give you tips and assess your personal finance.

a) Comparing Loan Options

When considering a loan, compare interest rates, fees, and the term of different loan options. Understand the implications of securing the loan against your home, as this could put your property at risk if you cannot meet the repayments.

b) Personal Loan Interest Rates Update

The average interest rate for personal loans has slightly increased in 2024, standing at around 6.5%. Borrowers should consider this when comparing loan options for accessing funds 

c) Immediate Relief v Future Worries

Taking out a loan can provide immediate financial support but may lead to future worries about repayment, especially if income is fixed or declining. The emotional impact of carrying debt into retirement should not be underestimated, as it can affect both your sense of security and financial freedom.

d) Securing a Personal or Secured Loan

  • Determine the amount needed and your ability to repay.
  • Compare loan options from various lenders.
  • Apply for the loan with your chosen lender.
  • Agree to the repayment terms and receive the funds.
equity release alternatives

Equity Release Calculator

An equity release calculator is an online tool for homeowners considering unlocking the value tied up in their house. 

By inputting details such as your age, the current property value, and any outstanding mortgage or debts secured against the home, the calculator provides an initial estimate of the amount that can be released from equity release. 

Try the equity release calculator below.

Try Age Partnership’s equity release calculator and estimate how much money you could release from your property.

If you take out a product from Age Partnership, we will receive a fee for introducing you to them. This helps support the site and for us to produce more content.

types of equity release

6 – Use Savings and Investments

Most retirees have some form of savings or investments tucked away for a rainy day. If you have any built-up savings or investments, consider using those to achieve your financial goals instead of using equity release.

However, before cashing in on any investments, be sure to consider any tax implications or, better yet, seek professional financial advice from experts.

a) Assessing the Impact on Future Finances

Using savings or investments can avoid debt but consider the long-term impact on your financial security. Evaluate how using these funds now will affect your future income and financial resilience.

b) Impact of Market Fluctuations on Investments

The recent market report by the Investment Association highlights the volatility in investment returns, underscoring the importance of careful consideration before liquidating assets as an alternative to equity release.

c) Financial Independence and Emotional Satisfaction

Utilising savings or investments avoids debt, promoting financial independence. However, depleting these resources can also bring emotional concerns about future security and the ability to handle unexpected expenses, affecting your peace of mind.

d) Using Your Money

  • Review your savings and investment portfolios.
  • Calculate how much you can afford to withdraw.
  • Consider the tax implications of withdrawing funds.
  • Access the funds as needed, keeping track of withdrawals.

7 – Rent Out a Room

If your home has more space than you need, consider renting out a room.

Under the ‘Rent a Room’ scheme, you could receive up to £7,500 per year for letting out furnished accommodation to a lodger.

If you’re healthy and able in your later life, getting a part time job or renting out a room in your home through the government’s Rent a Room Scheme could be a good alternative to equity release.

These options will also provide extra income to supplement retirement funds. Both options may help you access additional funds without having to release your home’s equity.

Along with earning extra money, part-time work can also help your social life by introducing you to new people and keeping you active.

On the other hand, the Rent a Room Scheme allows you to earn up to a certain amount of tax-free cash by renting out furnished accommodation in your home.

However, both options require time and effort, renting out a room in your home also meaning sharing your living space with others. Therefore, not everyone will think these choices are ideal for them.

a) Financial Benefits and Responsibilities

Renting out a room can provide a steady income. Be aware of the tax implications through the Rent a Room Scheme and consider any additional costs for home insurance or adjustments to accommodate a lodger.

b) Income Potential from Renting Out Rooms

The “Rent a Room” scheme tax-free allowance remains at £7,500 per annum in 2024, offering homeowners a steady income stream by renting out spare rooms.

c) Income Boost with Emotional Adjustments

Renting out a room can provide a valuable income boost. Financially, it’s an attractive option, but emotionally, sharing your home can require significant adjustments, including concerns about privacy and the day to day of living with a tenant.

d) Process for Renting Out a Spare Room

  • Prepare the room for renting, ensuring it meets safety standards.
  • Advertise the room on suitable platforms.
  • Screen potential tenants and agree on rental terms.
  • Regularly review the arrangement to ensure it meets your needs.

8 – Get Help From Your Family

You could ask for help from your relatives.

While this may not be an easy subject to bring up, they may prefer to help you than allow you to sign up to equity release deals which could leave them with little or nothing to inherit.

Furthermore, they might be more than happy to help if the funds are necessary for your health.

a) Setting Clear Financial Agreements

If receiving financial support from friends or family, establish clear terms for repayment to prevent misunderstandings. Consider documenting the agreement formally to clarify expectations.

b) Trends in Financial Support

A 2024 National Association of Family Financial Advisors survey shows that 30% of UK families have financially supported relatives, indicating a significant reliance on family networks for financial assistance.

c) Emotional Gratitude and Financial Relief

Receiving financial support from loved ones can offer immediate relief and strengthen bonds, but it may also introduce emotional complexities related to dependence and gratitude. It’s important to navigate these relationships carefully to maintain harmony.

d) Seeking Financial Assistance

  • Openly discuss your financial needs with your family or friends.
  • Agree on the terms of the loan or gift.
  • Document the agreement to avoid future misunderstandings.
  • Make arrangements for repayment if applicable.
is there a better alternative to equity release?

Some of the Best Equity Release Interest Rates as of 11 March 2024

The table below shows you some of the best equity release rates, as of 24 February 2024, for lifetime mortgages from some of the leading equity release providers in the UK. 

Provider NameProduct NameInterest RateType of productOffers
Standard LifeHorizon 200 Drawdown5.37%FixedFree Valuation
Standard LifeHorizon 220 Drawdown5.38%FixedFree Valuation
More2LifeCapital Choice Ultra Lite Drawdown 15.51%FixedFree Valuation
No application fee
Scottish WidowsFR15.60%FixedCashback
Free Valuation
No application fee
Standard LifeHorizon 280 Drawdown5.65%FixedFree Valuation
Scottish WidowsFR25.67%FixedCashback
Free Valuation
No application fee
Legal & GeneralInterest Roll-Up 45.69%FixedFree Valuation
Legal & GeneralOptional Payment 45.69%FixedFree Valuation
Standard LifeHorizon 280 Drawdown Fee Free5.70%FixedFree Valuation
No application fee
Standard LifeHorizon 280 Lump Sum Fee Free5.70%FixedFree Valuation
No application fee

The equity release rates have been sourced by UK Care Guide from the Equity Release Supermarket website. These rates may have changed since this table was created and should be taken as indicative only. There may be other providers not listed on this table that could offer better deals.  In addition, the providers and products noted may not be right for your particular circumstances.  Therefore, they should only be taken as a guide, and we cannot guarantee their current accuracy. Please also note that we do not provide advice on or endorse any particular product listed here. The rate you are offered will depend on your individual circumstances and subject to lender approval. Therefore, we strongly recommend that you speak to an equity release adviser, who will be able to provide you with information on the latest rates that apply to you.

Speak To An Equity Release Specialist Today

Call Boon Brokers on 0333 567 1607 to discuss your equity release requirements and see what deals are available to you.

9 – Claim Benefits and Grants

Government benefits and assistance are another alternative to equity release. These include benefits such as the state pension , pension credit , and council tax reduction.

For homeowners who are eligible, government benefits can provide a significant boost to their income. They can use this to meet their financial needs without giving up any of their house’s equity.

However, not everybody qualifies for these advantages. This is because eligibility depends on your income, savings, and other personal circumstances.

It’s also important to note that some benefits are means-tested. Consequently, releasing equity from your house may impact your ability to receive these benefits.

There are also ‘local authority grants’ available for homeowners who need to make home improvements for health or safety reasons. These incentives, provided by local authorities, could make it possible to pay for these changes without giving up home equity.

Another alternative to equity release is to claim all benefits and local authority grants that you are entitled to from the government. These include borrowing for home improvements or for conversions to deal with your disability. To find out what benefits you can claim, visit the Gov.uk Benefits Calculators.

a) Maximising Income Through Entitlements

Research your entitlement to benefits and grants, which can provide non-repayable financial support. Understand how additional income from equity release might affect your eligibility for means-tested benefits.

b) Updates on Grants and Benefits Eligibility

The Department for Work and Pensions recently updated its guidelines, increasing the eligibility threshold for certain benefits. This could impact homeowners considering equity release alternatives.

c) Securing Entitlements with Emotional Reassurance

Exploring entitlements to grants and benefits can provide financial support without compromising home equity. The process can offer emotional reassurance, knowing you are receiving all the support you’re entitled to, though it may also bring frustration if navigating bureaucratic processes.

d) Accessing Government Support

  • Research available grants and benefits.
  • Check eligibility criteria for each.
  • Apply through the appropriate government channels.
  • Provide necessary documentation and await a decision.

10 – Budgeting

If you’re not currently living within your means, look at your income and outgoings to see if any expenses are costing you unnecessary money.

The equity release alternative you pick will depend on your current financial situation, the amount of money you want to raise and how quickly you want to raise it. Just make sure to talk to an expert financial adviser before making a decision.

a) Effective Budgeting Strategies

Review and adjust your budget to identify savings on regular expenses. Consider switching service providers for utilities, insurance, and subscriptions to reduce monthly outgoings and free up cash.

b) Budgeting Research

The latest research from the Money Helper reveals that effective budgeting can save UK households an average of £600 annually, emphasizing the importance of financial planning.

c) Financial Control and Emotional Empowerment

Effective budgeting can free up funds and reduce financial strain, offering a sense of control and empowerment. However, adjusting to a stricter budget can also be emotionally challenging, requiring discipline and potentially limiting lifestyle choices.

d) Creating and Implementing a Budget

  • Review your income and expenses to understand your financial situation.
  • Identify areas where expenses can be reduced.
  • Set financial goals and allocate funds accordingly.
  • Regularly review and adjust your budget as needed.

Common Concerns About Equity Release Alternatives

Here are some issues someone may have about the alternatives above.  

1 – Misconceptions About Downsizing

Many believe downsizing is a straightforward process, but it’s important to consider the emotional and financial aspects. While downsizing can offer financial relief, it also involves significant life changes and potential upfront costs.

2 – Credit Cards as a Short-term Solution

There’s a common misconception that credit cards should be avoided at all costs. However, when used responsibly and with a clear repayment plan, they can be a flexible tool for managing short-term financial gaps.

3 – Understanding RIO Mortgages

Retirement Interest-Only Mortgages are often misunderstood as being the same as equity release schemes. It’s crucial to know that while they share similarities, RIO mortgages require monthly interest payments, affecting your disposable income.

4 – The Realities of Remortgaging

Some homeowners are wary of remortgaging, fearing it will lead to higher long-term costs. It’s essential to conduct thorough comparisons and consider how remortgaging can offer more favourable terms and potentially lower overall costs.

5 – Borrowing Money Responsibly

The idea of borrowing money, especially in later life, can be daunting. Understanding the terms, interest rates, and repayment plans is key to ensuring this option doesn’t compromise your financial security.

6- Using Savings Wisely

There’s a concern that using savings or investments for retirement needs is imprudent. However, if approached strategically, this can be a sensible way to fund your retirement without accruing debt.

7 – Renting Out Space in Your Home

Homeowners often overlook the potential income from renting out a room, and they are concerned about losing privacy or dealing with tenants. Knowing your rights and responsibilities as a landlord can make this a viable and beneficial option.

8 – Seeking Financial Support

Asking for financial help from family or friends can feel uncomfortable. Setting clear terms and understanding it’s a common practice can ease the process and provide a mutually beneficial solution.

9 – Exploring Grants and Benefits

Many believe that applying for grants and benefits is overly complicated or that they won’t qualify. Research and assistance from financial advisors can uncover valuable resources you’re entitled to.

10 – Effective Budgeting

The misconception that budgeting in later life has little impact should be dispelled. A thorough review of your finances can reveal significant savings and optimize your financial situation.

Addressing these common concerns and misconceptions directly can empower readers with the knowledge to make informed decisions about their financial futures.

is there a better alternative to equity release

Local Authority Grants and Assistance

Local governments provide a range of grants and help homeowners who require essential house repairs or adaptations. One example of this are disabled facilities grants, for homeowners who need to adapt their homes due to disability.

These grants could fund necessary housing work, whilst also avoiding equity release.

Applying for a grant from your local authority can be an excellent way to finance necessary home improvements without resorting to equity release. However, one must meet certain requirements to be eligible for these grants.

Before applying for a grant, it’s recommended to seek professional advice from a financial advisor.

They can help you with the application procedure and explain any possible costs, offering tips and assessing your personal finance. For instance, how the grant can affect your eligibility for other things, such as means-tested benefits.

While it’s clear that there are many alternatives to equity release, it’s essential to consider your personal and financial situation before making a decision.

Downsizing, obtaining a RIO mortgage, or requesting a grant from your local government are all choices, and each come with their unique advantages and disadvantages. Therefore, it’s always wise to seek professional advice to make the decision that best suits your needs.

Types of Equity Release

While there are many products available on the equity release market, there are two main ones, both regulated by the Financial Conduct Authority (FCA):

1 – Lifetime Mortgages

With lifetime mortgages, you borrow money against your home’s value. You receive a one-time amount, and you still remain the sole homeowner. For many, this option gives a more pleasant experience than others.

This equity release scheme has evolved over the years to provide flexibility in the way borrowers access their money and make payments. Consequently, different types of lifetime mortgages have emerged. To help you make your choice, we have compiled some information below that gives detail on the differences between them.

These include:

  • Drawdown lifetime mortgages – a drawdown lifetime mortgage allows you to borrow extra cash when you need it up to an agreed total amount.
  • Enhanced mortgages – these are unique plans for older homeowners with medical conditions.
  • Protected mortgages – a protected lifetime mortgage guarantees an inheritance entitlement for your children and family when the scheme comes to an end.
  • Interest payment plans – these schemes allow you to pay off some of the interest that builds up over the course of your loan. With this equity release loan , you make a commitment to regular Interest repayments. disadvantages

You can use an equity release calculator to see how much money you could borrow, based on your age and personal details.

Here is a short video that explains more about how lifetime mortgages work.

2 – Home Reversion Plans

Home reversion plans are a type of equity release scheme, offering homeowners an alternative way to access the wealth tied up in their property. 

Unlike lifetime mortgages, which involve taking out a loan secured against your home, home reversion involves selling a portion or all of your home to a reversion company in exchange for a lump sum or regular payments. 

This arrangement allows homeowners to remain rent-free in their property for the rest of their lives or until they need to move into long term care, such as into a residential care home.

The amount you receive from a home reversion plan will usually depend on your age and the value of the property. The older you typically are, the more you can usually release.

You should remember though that the cash you receive is generally less than the market value of the part of the property sold to the provider. 

This discount accounts for the equity release provider’s risk and the fact that homeowners continue to live in the property rent-free.

Here is a video explaining how Home Reversion Plans work.

 

Our Final Thoughts

This article highlights critical considerations and alternatives to equity release, offering a pathway to financial security without compromising homeowners’ assets.

Key information presented includes the potential for downsizing, credit card use, Retirement Interest-only mortgages, remortgaging, personal loans, leveraging savings and investments, and the benefits of renting out a room or seeking governmental support.

Homeowners are encouraged to evaluate their financial situation carefully, consider the emotional and financial implications of each option, and seek professional advice to make informed decisions that align with their long-term goals and needs.

Speak To An Equity Release Advisor Or Use the Equity Release Calculator Below To Estimate How Much You Can Borrow

The UK Care Guide works in partnership with Boon Brokers, one of the UKs leading equity release specialists.

You can contact them on 0333 567 1607 , or use the equity release calculator to estimate how much you can borrow.

Here is what Boon Brokers Offer

Whole of market access
Over a decade of experience
Great customer service

5 star client testimonials, on Trustpilot, about Boon Broker’s support and hands-on service

Call Boon Brokers on 0333 567 1607 to discuss your equity release requirements.

.

All equity release and mortgage advice is provided by Boon Brokers Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757. 

If you take out a product with Boon Brokers, we will receive a fee for introducing you to them. Boon Brokers provides advice for free and without obligation.  By contacting Boon Brokers through us, the cost of any equity release product would be the same as if you had contacted them directly.  

The fee we receive is used to help keep this site operational and to produce new content.  

Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.

Meet the author

Saq Hussain

Saq is a financial expert, and is responsible for the day-to-day running of the UK Care Guide website.  Prior to taking on the operation of this site, Saq was a Director and the UK Head of DC Pensions, Benefits and Wellbeing at PwC.  Saq is also a part of the steering group at the Living Wage Foundation that has developed the UK’s National Living Pension standard.

Saq has regularly featured in the press, with examples including:

UK Care Guide is really proud to have been featured on some of the UK’s leading websites

FAQ

1. What is a retirement interest-only mortgage?

A retirement interest-only mortgage, often shortened to RIO, is designed for older borrowers. Whilst you make repayments towards both the interest and the capital with a traditional mortgage, a retirement interest-only mortgage requires you to make monthly interest repayments solely. When the property is resold, the capital has to be repaid, usually when you move into long-term care or pass away.

RIOs can be a viable equity release alternative for those comfortable making monthly repayments during their retirement. It may also appeal to those who want to avoid the increased costs associated with equity release plans. As always, speaking with an equity release advisor can offer the necessary insight, helping you to make an informed decision.

2. Can personal loans be used as an alternative to equity release?

Personal loans can be used as a potential alternative to equity release. Personal loans are a type of unsecured loan, meaning that they are not tied to your property. They can be used for various purposes, such as home improvements, paying off debts, or supplementing your pension savings.

Alternatively, personal loans will typically come with higher interest rates than secured loans or mortgages. Also, your credit score and financial situation can significantly impact your eligibility and the interest rate which you’re offered. Therefore, before opting for a personal loan as an equity release alternative, it’s crucial to factor in these potential costs.  You can do this by looking for financial advisers in your local area.

3. What is an equity release mortgage?

An equity release mortgage allows you to retain ownership, whilst also allowing you to borrow money against the value of your home. Relieving equity from your home can provide a lump sum of money, a regular income, or a combination of both depending on your needs.

Furthermore, you don’t have to make monthly repayments with a lifetime mortgage. Rather, the loan and accumulated interest are repaid when the property is sold. Nevertheless, remember that interest can compound quickly, increasing the amount you owe over time. It’s always recommended to seek professional advice from an equity release adviser before opting for a lifetime mortgage, allowing you to discuss the costs involved.

4. How can I calculate how much equity I can release?

An equity release calculator is a handy tool for estimating the amount of equity you can release from your home. The amount you can release depends on multiple factors, such as your age, the value of your property, and the specific terms of the equity release plan.

An equity release calculator can only provide an estimate, meaning that you should consult an equity release advisor to gain a more accurate figure and a comprehensive understanding of equity release. They offer guidance throughout the process, helping you to understand the potential implications of releasing equity from your home.

More interesting articles about Equity Release

how does equity release work

In this article, we answer 22 important questions that you may have about equity release, including what it is, how it works and what the best interest rate deals are.

Alternatives to equity release

Equity Release is not for everyone.  In this article we look at the alternative options that you can consider if you need access to money in later life to pay for care, top up your pension etc.  

Lifetime Mortgages

A lifetime mortgage is the most popular type of equity release scheme, as it’s the most flexible and versatile option. The amount you receive depends on your property value. 

Pros & Cons of Equity Release

In recent years equity release has become a very popular option. This article looks at the pros and pitfalls of equity release and what you need to consider before taking it out.

How much can you borrow

How much you can borrow from equity release varies depending on your age and house value.  In this article we look at how much you could borrow from your  home.  

Drawndown Lifetime Mortgages

A drawdown mortgage is a type of equity release scheme, offering greater flexibility and freedom compared with traditional plans. In this article we explain all that you need to know.

Equity Release Calculator

An equity release calculator will give you a good indication of what you can borrow from your home.  This article explains how the calculator works and also shows you what you can receive.

what happens when you die

One of the big concerns that people have about equity release is what happens to their home and borrowings when they die.  In this article we explain everything you need to know.

Home Reversion Plans

A home reversion plan is primarily suited to individuals over 65 looking for a solution to their finances.  This article explains all you need to know.

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Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.

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