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Home Equity Release
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Home Equity Release      Types of Equity Release Scheme

Types of Home Equity Release;

Lifetime Mortgages & Home Reversion plans.

The brief difference between the two main types of 'Lifetime Mortgage' are as follows:-

Roll Up Mortgage - A large lump sum is given for the whole amount at initial deal.
Drawdown Mortgage -Less cashis given up front initially then smaller amounts are with drawn when required.

Lifetime Mortgages explained;


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Roll-up mortgage.

  • You are offered a cash lump sum, or a monthly income, or both based on the market value of your home.
  • Interest on the loan is not repaid but is added or 'rolled up' on the initial loan.
  • The loan and interest is only repaid on the sale of the property once both couples have passed away or sold their house.
Drawdown mortgages.
  • Again an intial sum will be given based on the market value of your home.
  • Interest is added to the loan amount and not paid back until the sale of the property, usually when both partners have died.
  • Additional smaller loans are given as required.

Home reversion Schemes explained;

A Home Reversion plan is when you sell your home or a percentage of your home to a Reversion company. You remain living in the home rent free until both partners die.
Again schemes vary - you might receive a cash lump sum, a monthly income, or a combination of both. This should be discussed with a financial adviser. Request individual advice below.
A reversion company can not sell your home unless you and your spouse die or you both move homes or into a care home.
  • Payouts range from 20% - 60% of your homes value and depend mainly on the age of you and your partner.
  • The older you are the more you'll receive vice versa.

Home Equity Release - Types of Equity Release - Equity Release Application

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How much can I borrow?

Schemes vary however general rules are as follows;

  • A 60 year old maybe able to borrow around 25% of a property's value, this will rise by 1% every year. The older you are the more you can borrow against your home.
  • Therefore a70 year old should be able to borrow 35% of the property's value and 40% when 75.
  • Equity Schemes do vary so it is best to seek some advice about your own opportunities - fill out our short form for more information.