Let’s go over the main benefits of an Equity Release Scheme! First, it can provide you with a huge amount of money or with extra regular income so that you can enjoy your retirement. Second, the amount of money that you get from an Equity Release Mortgage is free of tax. Third, you do not have to sell up your childhood home and move to a cheaper house. Fourth, as such mortgages are becoming more and more prevailing, interest rates tend to decrease. And last but not least, such a mortgage is a legal way of cutting out inheritance tax bills. So instead of paying such bills you might find it better to give your relatives a deposit so they can have their own loan, mortgage or buy their own house. On the other hand, in case you do not have any children to leave your house to, then an Equity Release Scheme could be the best existing offer for you!
And what about the different types of equity release schemes? The two main types are the lifetime mortgages and the home reversion equity release schemes. However, there is no huge difference between the two. Both offer the same thing: a way of releasing part of the value of your home to ameliorate your retirement income. In the one hand, a lifetime mortgage will provide you with a regular income, or with a huge amount of money in cash, while you arrange an interest-free loan paid off when the property is sold. On the other hand, a reversion plan provides you with some money, but in return you have to sell a proportion of your house. It’s simple, isn’t it?