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More than half of homeowners over the age of 55 seem to misunderstand equity release, with 52% not realising that you can still move home with an equity release product and 55% not knowing they can get the cash lump sum tax-free. To make matters worse, the survey from SunLife shows that this percentage rises to 64% among those aged 55-65.
Meanwhile, 65% were unaware of the fact that you can release equity from your home even if you still have a mortgage to pay off, as overall only 11% of respondents said they fully understand all features of equity release products. Given that 18% of homeowners over 55 still have a mortgage to consider, they could be missing out on the benefits of equity release without even realising it.
"Three in 10 over 55s would consider equity release, and it is possible that many more would too if they understood the product properly," commented SunLife's Simon Stanney, especially as one in five said they feel worse off financially than they expected. With the large rise in house values seen over the last few decades, homeowners have multiple means at their disposal of generating some extra cash from their property.
Downsizing is one option to consider, but according to the data, 62% of those who are over 55 years old don't want to move, with 71% of those aged 70 or over saying they want to stay put. This leaves equity release as the main option for releasing some of the value from one's home.
Before deciding whether equity release is worth considering, homeowners would do well to research the topic. Our equity release page could be a great place to start, as it includes not just an overview of lifetime mortgages but also plenty of answers below the table.
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