Equity release can be a good way for older homeowners to unlock some of the equity they have built up in their homes without having to move home by downsizing or worry about making monthly repayments. As well as this, as competition with the equity release market has grown over the last five years, borrowers now have more option when searching for the right deal for their needs, including options that allow them to repay some of the interest or the money borrowed, while drawdown is now a common option on many equity release deals. Saying this, equity release still has a long-term impact on borrowers’ finances, as well as the inheritance they will leave behind, which is why it is important to speak to a financial adviser before going ahead with equity release.
As Rachel Springall, finance expert at Moneyfacts.co.uk, explained: “It is important for any borrower considering equity release to carefully go through the options available to them and seeking independent financial advice would make it much easier to navigate the abundance of deals on the market today. The right choice will depend on personal circumstances and there are many factors with a lifetime mortgage to consider, such as associated fees and any flexibility with drawing wealth out of the home such as with a drawdown option. Hopefully, we will continue to see resilience in the market in the months to come as we ease out of lockdown.”
For more information about equity release, read our guide equity release explained.
