Many people find themselves needing access to more money in retirement but if you don’t have enough savings what are your options?


Well one option could be to use the value of your home to boost your finances. A Lifetime Mortgage is a way of extracting money out of your property by putting in place a loan secured on your home. This could be a ‘one-off’ lump sum or a facility to draw on regularly to supplement your income.


It’s only available to people aged over 55 and does not need to be paid back until your property is sold or if you have to move into a care home. In the case of jointly owned property, it is only triggered when the survivor either dies or goes into long term care.


No income proof is required and your credit status is not considered. Your house can become part of your retirement planning! How attractive is that?

Unlike a regular mortgage you can choose whether you wish to make monthly repayments. If you choose not to, interest rolls up every year until the home is sold leaving you extra money each month that might previously have been spent on your mortgage payments. Alternatively, you can control the role up of interest by making regular repayments, or Lump sum repayments, of up to 10% per year, just like a normal mortgage, to help maintain the equity in your property.


You retain ownership of your home, and the equity in your home, after repayment of the mortgage on your death which can pass onto your beneficiaries. Your loan, plus any interest, will never exceed the value of your property. There is called a ‘no negative equity’ guarantee.


Obviously using your home to supplement your retirement income should not be your only strategy, but knowing that it can help make life in retirement more comfortable might let you see the equity in your home in a whole new light. It is not just a place to live, but one of the many tools that you might want to use as a way of planning for your future.

How does Equity Release work?


There are three types available …

Roll-Up Lifetime Mortgage – This lets you take out a loan secured on your property to be paid back when you die from the proceeds of selling the house. You remain the owner of your home.

Drawdown Lifetime Mortgage – This allows you set up a drawdown facility in a reserve account and use this as and when required. Interest is paid only on the amount drawn down, with the balance held in reserve.

Interest-Only Lifetime Mortgage – As with the two products above, you receive a lump sum and maintain 100% ownership. Unlike the others, you can choose to pay the interest on a monthly basis, if you wish, with the option to roll up interest at some point in the future if you change your mind. With all systems you have the ability to repay the loan in part, or in full outside predetermined time limits.


Is it right for me?

Raising income from your home is a big decision and might not be your best or only solution. It’s important to discuss it with your family so they understand how it works and how it may affect them.

It’s also essential to get professional financial advice to ensure that it would be right for you, meets your needs and to explore other options that may be available.


At One Stop Finance we have years of experience which enables us to provide the right advice for our clients.

We recognise that each person’s situation is different, so we ensure that we carry out a thorough assessment of their needs, their situation and the options available to advise them accordingly.


For more information about Equity Release, please call us on 020 8441 2605 or 01442 232 272.