Welcome to Age Space money, the podcast that gives you insight, ideas and perspectives on elderly care and finance. This podcast is presented to you by Annabel James, founder of Age Space, which is an online community for anyone looking after, or supporting, an elderly parent; and Jason Butler, financial wellbeing expert and author of “Money Moments: Simple Steps to Financial Wellbeing“.
In episode 3 Annabel and Jason discuss the topic of equity release. Jason helps to explain what equity release is, and the key considerations for a family before opting for equity release.
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Jason's advice on other options to consider first
Before you consider releasing equity on your home, ask yourself why you would not sell your home and downsize. Buying another home for lesser value and releasing the equity is the cheapest, simplest and easiest option.
However, if you want to release equity on your home, you could sell a proportion of your home to an equity release provider, who will take a proportion of the increase in value of your home. Whilst, this way, you are guaranteed to keep your home for the rest of your life, the amount they get in ownership is often more than they give you of the market value, so you will need to consider if this is the best option for you.
Use the Age Space Equity Release Calculator (Coming soon) to estimate how much you or your relative may be able to release from your home using an Equity Release scheme
Jason explains how lifetime mortgages work
A lifetime mortgage is the most common type of equity release package that people buy. It is effectively a loan taken out against the value of a property. If you already have a loan on your home, you may consider taking out a lifetime mortgage secured on your property at a fixed rate of interest, but where the interest rolls up.
There are different types of lifetime mortgages, and some offer the option of paying off the interest so that it doesn’t roll up, if you can afford to – this is a genuine opportunity to consider, if you can.
Find out everything you need to know about Lifetime Mortgages from our comprehensive guide to Lifetime Mortgages.
Jason advises that you should seek financial advice
Seek financial advice. Equity Release advisers are specially authorised, and can walk you through the options – they normally won’t charge for an assessment.
Think about the implications for keeping or releasing funding on your home, and be clear about the implications for your potential estate beneficiaries.
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