What you can use equity release for

This tops the list among our customers. Whether it’s futuristic smart locks for your doors, a bigger room for your Aunt Betsy, or a solid set of grab bars for your bathroom, home improvements can be pricey. And as you age, you might find yourself needing to invest more to keep your home accessible. In fact, to prepare for any mobility issues you may have, it's worth exploring every avenue, as you might find there are grants from the government or local authority that could help as well.

If your residential mortgage is becoming difficult to manage and your existing mortgage provider has confirmed that all options with your current mortgage have been exhausted a lifetime mortgage may be an option to consider to pay the balance on your existing mortgage. Even if that’s not your main reason for applying – if you do have a balance left on your mortgage – you’ll still have to pay it off first, and you can do that with the cash you release. You may also have unsecured loans (which aren’t tied to an asset, like your home) that you’d like to clear as you head into retirement. 

It’s important to remember that a lifetime mortgage is a long-term loan secured on your home. Compound interest quickly increases the amount you owe, which will reduce the inheritance you’re able to leave behind. Using a lifetime mortgage to repay existing debts may not be the most cost-effective option, as you’re replacing one form of debt with another. That’s why you must seek financial advice before taking out a lifetime mortgage.

You can use your lifetime mortgage to buy a second home or holiday home. This could provide a new source of income, or be a savvy investment towards future summer getaways. While it’s not that common – among our customers anyway – there are other ways people use the money to invest in property. For example, one possible way is to buy out the other person’s share of a property you own together, or perhaps even to extend the lease if you have a leasehold property.

The current economic conditions, including inflation, are leading to higher prices for things like groceries and energy bills. In some cases, releasing equity might give you a sense of security and ease concerns about maintaining your quality of life. 

However, it's important to remember that this is a long-term loan secured against your home and has a bunch of fees tagged on. You'll be charged compounding interest, as well as legal fees and possible valuation and advice fees.

With our lifetime mortgage, you can get a lump sum upfront and set up a cash reserve for later to withdraw money when you need it, subject to our minimum withdrawal amount. This could serve as a reassuring safety net when budgeting for upcoming expenses, especially if your pension fund isn't quite as big as you’d like. No interest is charged on your cash reserve until you take money from it, at which point the terms and interest rate available at the time will apply.

Rather than letting the value of your home just sit there, many of our customers release it to help them get out and about in different ways. Putting that money towards a car, for example, could help you stay mobile, independent and connected to friends and family in the years ahead. A similar proportion of our customers devote a chunk of their money to travel, whether that’s visiting loved ones who live overseas, or simply ticking off those yet-to-be-seen parts of the world from their travel wish list.

Leaving an inheritance after you’ve gone might be important to you, but so might supporting your nearest and dearest while you’re still around. A lifetime mortgage can be used to lend a financial hand to children or loved ones, whether to help with debt, university fees, wedding costs or that tricky first leap onto the property ladder.

Whatever the reasons you’re considering releasing money from your home, remember that it is a major decision, and you’ll need to take financial advice. You should always look into your other options too, such as these alternatives to equity release such as downsizing.

It's important to consider the benefits, costs and risks before deciding whether a lifetime mortgage is right for you. You can read more in our guide to equity release.

Learn more about some of the costs you might come across with equity release.