Which Equity Scheme is right for you?

The answer will depend upon many factors, including:

• Whether you have dependants. Do you want to leave money to any relatives?

  If you have no dependants then look at Reversion schemes where you can sell up to 100% of your home. This will offer more money from a property than a Lifetime Mortgage plans

• If you have any dependants

  Look at a Reversion Plan. But this time only sell a percentage of your home, this guarantees that no matter what happens to the value of your property the remaining percentage will always be available for your beneficiaries

• How much you need to borrow

  A Roll Up mortgage may not provide enough money, but larger sums are available under a Reversion Plan providing you are willing to sell a considerable percentage of your home

• Your Age / Youngest Age

  Reversion plans are generally not available until the youngest applicant is 65 whereas Cash Release plans are available from 55

• Life expectancy

  With a Reversion plan interest is charged upfront, usually based on average life expectancies
  
  

  If you, or both of you in the case of a joint plan, are unlikely to live a long time, or intend to sell the home shortly after taking out the plan you could lose out more under a Reversion Plan than a Cash Release scheme
  
  

  This is because your beneficiaries would only be liable for the initial amount borrowed plus interest due during your lifetime

• How much spare income you have each month

  If you have considerable spare income each month and only want to release capital to spend, an ordinary interest only mortgage might be better as providing you pay the interest each month
  
  

  The debt would not build up and the interest charged by the lender would be lower
  
  

  Alternatively, if you didn't want the extra monthly expenditure a specialist Equity Release Scheme would be better

Are there any properties on which you cannot release equity?

Yes -

• Currently no specialist providers lend in Northern Ireland and some do not lend in certain parts of Wales
  
  
• Properties worth less than £40,000 would not be attractive to a finance company
  
  
• Leasehold properties where less than 75 years of the lease remain, or when the property is part of a trust
  
  
• Freehold flats may also be unsuitable. As might some former council houses and one bedroom properties
  
  
• Some companies will not lend on properties already owned under 'Tenancy in Common'.