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Equity release explained.

Although equity release can seem confusing, we're here to help you understand the process and put your mind at ease.

How it works.

The UK's most popular kind of equity release product is a Lifetime Mortgage. With this product, you can access a part of your home's value as a tax-free cash lump sum. The amount you can borrow primarily depends on your age and the value of your home.

There are no mandatory payments and the interest can be left to roll up over time, being added to the amount borrowed. Full repayment is not then due until you have died or entered permanent long-term care, and is usually achieved with the sale of the home.

Releasing equity with a Lifetime Mortgage will also guarantee that you retain 100% homeownership and can continue living there for as long as it remains your primary residence.

Naturally though, by releasing equity from your home today the value of your estate will be reduced. An injection of tax-free cash could also affect your entitlement to means-tested benefits. Speak with an adviser to further understand the features and risks involved with releasing equity.

Our safeguards.

We are a member of the industry trade body called the Equity Release Council, and, as a part of this, can guarantee that our products will come with many customer-focused safeguards that enable us to protect you and your loved ones. Here are a few of these safeguards:

All of our plans come with a ‘no-negative-equity guarantee’.

This product guarantee means that, even if the property market were to change significantly, you will never owe more than the value of your home.

In the unlikely event that your Lifetime Mortgage balance was higher than your home's value, then the excess would be written off. This quite simply gives you peace of mind that your loved ones won't inherit your Lifetime Mortgage debt.

A fixed for life interest rate.

The interest rate on your initial advance will be fixed at the time that you take out your Lifetime Mortgage and is guaranteed not to change.

You have no obligations to pay any of the interest through the duration of your mortgage, although all customers will have the choice to make voluntary payments towards it if they so wish. These voluntary interest payments will not usually incur an early repayment charge.

Providing a fair offering.

We closely follow and adhere to recommendations provided by these industry bodies and change our practices accordingly to ensure that all of our customers are being treated fairly and feel safe.

Responsible Lending is a regulated mortgage lender and follows the code of conduct set out by our industry standards body, the Equity Release Council.

You can feel reassured by financial and legal advice.

Applications must be submitted by a qualified financial adviser and you must receive both financial and legal advice before entering into a mortgage agreement. This is to ensure that equity release is right for you given your individual circumstances and that you understand its implications.

Common reasons our customers release equity:

A Responsible Lending Lifetime Mortgage can be used for a variety of purposes. Accessing some of the equity tied up in your home can be used to turn your retirement dreams into a reality. Here are a few options our existing customers have used the money for:

Clearing an existing mortgage.

If you have an existing mortgage, it's a requirement that this is cleared before you can release equity. You can achieve this either through existing savings or with the cash that you release. In fact, releasing equity to clear an existing mortgage is one of the most popular uses of the product, and can help to free you from the burden of required monthly payments.

Making home improvements.

As you retain the right to live in the property for life, or until moving into long-term care, a Lifetime Mortgage provides you with a great source of funds to complete those long-planned home improvements, such as adding the extension that you have always wanted.

Gifting an early inheritance.

There is nothing better than the prospect of seeing your loved ones enjoy their inheritance. With a Lifetime Mortgage you could fast-forward their inheritance and provide funds to allow loved ones to get on the property ladder, pay for education, or simply enjoy as they wish.

Making large purchases.

Equity release can be used to make your life more efficient and comfortable by using the cash to upgrade your high value items or realise many of your later life goals. Are there places you have never been that you've always wanted to visit? Or that car that you have wanted? Equity release can be used to make your life more comfortable as well as realising many of your later life goals.

Read one of our case studies.

Read about some of our real customers, and learn about the reasons behind their equity release intentions.

Click to view

What could you expect from an equity release journey?

When choosing a Lifetime Mortgage, it is imperative to understand the benefits and risks. That's why it is essential to undertake the steps below to ensure that equity release is the right option for your needs.

Step 1 - Advice and Recommendation

Equity release is a lifelong commitment, so it is important that you receive expert financial advice. Your initial consultation will involve you discussing your situation, your finances, and what your hopes are for your equity release product. You will then be provided with a recommendation personalised to your individual needs.

Step 2 - Illustration and Application

If your equity release adviser deems a Responsible Lending product to be suitable for your needs, they will then provide you with a Key Facts Illustration. The Illustration will explain the full terms and detail how your interest will roll up over the lifetime of the mortgage. Once you are happy with the recommendation, you can progress to a full application.

Step 3 - Valuation Report

Upon receipt of your application, we will immediately instruct a local surveyor to contact you to arrange a mutually beneficial time to conduct a valuation of your property. Once the valuation has been completed, they will send the report to us for assessment.

Step 4 - Offer and Completion

Once all our checks have been completed, we will prepare and send out your Lifetime Mortgage offer. We will instruct our solicitors who in turn will work with your nominated solicitors towards completion. Your solicitors will guide you through this process and will set an appointment date for you to sign all the relevant documentation required. We will release funds to you via your solicitor who will deposit your release into your nominated bank account. All that’s left is for you to enjoy the proceeds!