Many people entering later life find themselves asset-rich but cash-poor. Owning a home can mean significant net worth, but it might not translate to sufficient disposable income. If you’re in this situation, equity release can help you enjoy a more comfortable retirement by freeing up some of the value locked in your home.
A Lifetime Mortgage allows you to access tax-free cash from your home’s equity, enabling you to fulfil lifelong dreams and enhance your retirement lifestyle. Here are some common ways people use equity release:
- Paying Off Existing Debts
You can use a lifetime mortgage to pay off existing debts, such as an interest-only mortgage nearing its end, loans, car finance, or credit card debt. Eliminating monthly repayments can improve your financial comfort in retirement.
- Home or Garden Improvements
Many people use equity release for home improvements. Whether updating a tired kitchen or bathroom, installing new windows, or creating a garden oasis, these changes can significantly enhance your living space.
- Holidays
Equity release can fund dream vacations or regular getaways to escape the weather. Some even use it for activity holidays like skiing, cycling, or trekking.
- Buying A New Car
Whether it’s treating yourself to a new car, finding a more reliable vehicle, or accommodating family needs, equity release can provide the funds.
- Increasing Retirement Income
A lifetime mortgage can supplement your retirement income through regular payments or a drawdown facility, where you take an initial lump sum and make additional withdrawals as needed.
- Helping Loved Ones
You can use equity release to provide a ‘living inheritance’ to help children or grandchildren with education costs or onto the property ladder, seeing the difference your gift makes during your lifetime.
- Emergency Funds
Keep extra funds in reserve with a Drawdown Lifetime Mortgage for emergencies. Interest is charged only on withdrawn funds, providing a safety net.
- Buying A Property
Use equity release to purchase a new home, a holiday home, or a rental property, possibly with additional funds for necessary alterations.
- Healthcare & Care Fees
Equity release can fund private healthcare, cosmetic surgery, dental work, or adaptations to your home if needed for medical reasons.
- Inheritance Tax Planning
Equity release can help reduce potential inheritance tax by ring-fencing some of your home’s value for your beneficiaries.
Restrictions on Equity Release Usage
While equity release offers flexibility, it’s important to use it wisely. Avoid using released funds for gambling or high-risk investments, as these can be particularly detrimental in later life.
For Equity Release we act as introducers only. Equity release isn’t suitable for everyone, so seeking expert advice is crucial to ensure it’s the right choice for your circumstances.