Does anyone know anything about property equity release?

[TeapotCollection]

This is something we’re starting to think we might consider when we get old as we don’t really have anyone to leave our house to

Would we have to pay rent?
What percentage of the value of the house could we expect to get?
Would we still be liable for repairs?
Anything else we need to consider?

Any advice would be much appreciated

It can prove to be a very expensive way of raising capital and should really only be considered as a last resort, in my professional opinion as a financial adviser.

It can be the right solution for the right situation but that all depends on the personal circumstances and objectives.

There are two types of equity release - one is a lifetime mortgage where interest is charged but you retain ownership of the property and liability for maintenance. The other is where you effectively sell your house and rent it back from the equity release company, and they'd expect you to maintain it in good repair.

How much you can borrow depends largely on your age and health/life expectancy, as well as on the value and type of property.

Why are you thinking you might consider it? What is your need? Are there other ways of achieving that need?

Strongly suggest you read the thread from FruHagen before you do anything.....

It is a very expensive way of borrowing, the debt may become more than the property is worth. Look into it very carefully.
There is another thread on here about a family who have discovered that a house had equity release of 30k and the debt is now 160k, read that first to get some first hand insight.

The issue on the other thread was discovered by the homeowners daughter.
If you have nobody to leave the house to and will never want to sell to downsize then it might be an ok option

It is not something to do lightly and you should only do it on the basis that you expect the house to belong to the equity release company when you die.

There is a good fact sheet from Age UK here fact sheet though I think 55 or 60 is far too young.

Blimey, probably not the best idea then by the sounds of it

Sunseed there isn’t a need as such, we just thought that when anything happens to us instead of our house going to relatives who we hardly ever see we could have the money ourselves and spend it 😁 seriously that really is it. We would fully expect the house to belong to them once we’re gone

We’re nowhere near old yet (one each side of 50) so we’ve got plenty of time to decide what to do, hopefully 🤞

Thank you all for your input, off to read that thread and look at that Age UK leaflet.....

To clarify, we would fully expect the house to belong to the equity release company if we did it

I think if you go into it on that basis it’s fine
You might as well enjoy the money now rather than some distant rellie enjoy it one day
The other thing to be careful of is that one of you will undoubtably die before the other so check what the situation would be then as the surviving partner might end up a bit stuck

For example if they needed a bungalow or retirement property

Hopping that’s exactly what we’re thinking. If everything goes to plan we’ll already be living in our forever bungalow by then

That thread though 😮 those poor folks

That leaflet is very helpful thank you JoannaDory

OP, thankfully you're far too young to be eligible for equity release for a few years yet anyway!!

It might be something to consider if one of you had died and there was no particular consequence for the survivor spending down to the last penny (though could inadvertently cause problems if care needs were in play so still need to take proper advice).

If you have downsized to your forever bungalow at some point then that's the point at which you release the equity anyway with which to both have fun. And if you really don't want to leave house to distant relatives then you could make a Will and leave the house to someone you'd rather see it go to, possibly charities that are meaningful to you?