Has anyone done equity release?

I had an interest only mortgage which came to the end of term and I took out an equity release mortgage. There are lots of products available with different options. For me it was a lifesaver as I don't want to move. I have the option which I have so far used to pay back a maximum of 10% of the original loan each year in between 1 and 12 payments a year. This covers the interest for the year plus part of the capital.
There are lots of different options so do your research, use a few different companies to get as much info as possible and only do WHAT IS RIGHT FOR YOU.
The market is much more regulated now than it was 20 years ago when most of the horror stories originate from which mean that you are much more likely to find a deal that is the correct one for you.
Do watch out for early repayment penalties and the conditions associated with them.

I think you have to bear in mind that equity release companies are not in business to help you out ... they want to make money out of you. Just remember that when making your decision, but I have to say I would never do it no matter what the circumstances.

My parents did. In nine years (till they had both sadly died) interest meant we were left with just 50% of the value of their house...

So if you do it, investigate the pros and cons very carefully.

Hazbeen ... exactly the same circumstances with my Mum. Mum and stepfather took £30k Equity release (or Lifetime Mortgage, as it’s called) on their home in 2004. SF has died, Mum is 91yrs old and in a care home. We (family) are selling her house to pay for her care home fees. Amount owed is now £81k ...! 6.75% interest ...
I’m not sure what their alternative choices would have been in 2004 but I would treat equity release with caution ...

Whatever you do, take independent legal advice before committing to something like this. Whatever you decide, good luck

I know someone who took equity release and then had to sell to pay the equity release because she couldn’t afford the payments ! By the time she did that she had nothing much left over and ended up in a crummy little flat she hates !

*No, you owe what you borrowed plus any interest if you dont pay any.

You owe an amount not a percentage.*

Ah, I see, thanks. I thought it was the other way round.

I think you should take professional advice first.

Citizens Advice could possibly advise you.

Frankly, I wouldn't go in for equity release. I accept that some people may have a good experience but I think they're very much in the minority.

I understand that things have changed and the market is more stringently regulated now.

I did consider it last year when I did not know how the heck I was going to manage to pay the top-up fee for my OH's nursing home - I was adamant that he would have the best of care in the best possible surroundings whatever it might cost. In the end I opted to put my home on the market as I knew I would be happier a couple of villages away where all my friends are - so selling would generate the money I needed and give me a happier life. As it has turned out my OH died before all this could happen.

But.....what I did discover was that sometimes the interest you pay on a lifetime mortgage might - if you are lucky - be partially offset by the increase in property value when you sell. But times are weird now and there is no guarantee that the housing market might not slump now.

I took advice from a trusted financial advisor recommended by my SonIL's advisor. She was very open about it all as far as I could tell.

I am sorry that you find yourselves in this difficult situation. If downsizing really isn't for you, then it is worth looking into - but with sound impartial financial advice rather than a response to an advert.

Have a chat with a mortgage broker before considering equity release. You can still get a mortgage up to age 80 - if you can afford the repayments - and it's a cheaper way to borrow.

Hello Kandinsky, Yes we have just received ours ,we went through four companies, in all each had different things to add so we took our time and chose not the cheapest but the one we thought was best for us. We did of course discuss this with our children, as this will be needed, if and when the time comes that they inherit our home, we wanted them to be clear on what would happen in the future. The reason we went for Equity release, we as because we down sized to our forever home, and my husband had planned to do the work himself, which he was excited about, halfway through he was taken I’ll, had surgery, and is still recovering, However he will not be fit enough to complete the Extension, and fitting of bathrooms and kitchen, My advice is to take your time, and look at all the reasons you need to choose this option, good luck ?

Please don't unless you have all the facts about what happens with the repayments, they double very quickly . Just get someone who understands the process like Martin Lewis, but really, really think about it.Would downsizing be so bad? Take care and good luck.

My mother took an interest only loan on her house quite a few years ago. It meant she had a lump sum which she used to go on holidays and improve the house. As she is paying the interest the debt doesn't go up. Of course it doesn't go down either but the house has increased in value a little. When she dies the interest will be paid and there will still be an inheritance for her children. This seems better than equity release as such. In retrospect it may have been better if she had taken a standard loan which would have been paid off by now but maybe she was too old for that at the time and this type of loan seems definitely cheaper than quite a few equity release schemes where you hear of people ending up owing the whole value of their house.

The thing is no one is entitled to inheritance. My children told us that if we wanted to to go ahead. Remember they will most likely be in their 50s to 70s when we die. Not children.

I hate the way equity release companies imply that if your family is supportive its because theyre not greedy and arent after your inheritance, and if theyre sceptical they need to be told that you need to enjoy your life not just live to preserve inheritance

We had that issue when a family member looked into equity release and we were concerned because their property was not adaptable and we worried that it wouldnt work for them long term and they needed to have money to move to somewhere more accessible if they got frailer.

It was reframed as us not wanting to spend money on enjoying their lives. The companies they spoke to were very very clever. Lots of stories about people with NICE SUPPORTIVE relatives Vs bad boo greedy relatives. They primed our relative so that by the time we aired our concerns (when asked!) they were convinced we were worried about inhetitance.

We werent. We were worried that their property wouldnt adapt as they grew and they could end up trapped there finding it difficult to move.

MIL did this and borrowed a percentage of the property valuation e.g. 10% then when she died they took 10%. Seemed fairer way of doing it

Even the ads groom people against listening to concerns

"Good" relatives saying "we want you to do it because we're not greedy"

As said upthread. These days most people are OLD themselves by the time they inherit so have already had to find their own way to have a family home. Nobody is waiting for inheritances to make plans because you could be waiting until youre retired yourself.

In the case of my relatives, they werent all that settled where they were. They often toyed with moving to another area. It was an older property that is hard to maintain and there are maintenance clauses in the contracts. It wont suit them if they become less mobile because of the awkward lay out. Its not a good area to live in once they can no longer drive.

But they had been so primed by the reps that our scepticism was brushed off as veiled inheritance concerns.

Bearing in mind that we are all well into middle age, all home owners, and all have nearly grown children... we're not exactly looking round their place with pound signs in our eyes!

MIL did this and borrowed a percentage of the property valuation e.g. 10% then when she died they took 10%. Seemed fairer way of doing it

She must have repaid interest before she died because you pay back more than you borrow.

We did it because our mortgage was due to be repaid and a second loan was high. We took out £80,000 on a £240,000 house and I was surprised when we got our first annual statement which shows a £9,000 addition of interest. I think it's ok if you pay something off each month, which I will do this year to avoid the equity being eaten away, but if you leave it there won't be much left to pass on. We can't downsize really because we have adaptations for disabled hubby who needs the space.

I would avoid unless absolutely necessary.

The sector is much better regulated now so at least the information is out there.

A lifetime mortgage may be a better option if you can afford it.

Would second Money Saving Expert as a source of information.

It’s not something to be entered into lightly. My sister and BIL did it, and when I had to sell their house when they died (I was the executor), it was very difficult. However, things may have changed now, but research is throughly recommended.

Find a well recommended mortgage broker and they will explore the best option for you. We took out a small Retirement Interest Only mortgage to enable us to carry out internal changes to our new home. A good broker will guide you through it and get the best product and deal on the market for your circumstances. Our fee was £200 and was worth every penny.

Just to add, only the amount we borrowed will come off the house sale when we die so we know the exact amount.

merlin it sounds as if your situation is very similar to ours.

Don't particularly want or need to do home improvements (apart from getting the quite small garden sorted) just want to be able to stay in this house.

Look out for maintenance clauses too