Equity Release Plans Compared
If you aren't sure which type of plan is best suited to you, please compare the two below as they both have different requirements, and features.
| Lifetime Mortgage | Home Reversion Plan | |
|---|---|---|
| Is there a minimum age? | YES, you must be at least 55 and if a couple the youngest must be at least 55 too | YES, this is for individuals or couples where the youngest is aged between 65 and 80 |
| Is there a minimum house value? | YES, depending on the provider this can range from £70,000 to £125,000 | YES, depending on the provider this can range from £70,000 to £125,000 |
| Is this plan a loan? | YES, you borrow the money and the loan and interest is secured against your property | NO, your home is fully or partly sold to a reversion company |
| Can I release all the equity in my home? | NO, the amount depends on your age and other circumstances | YES, you can choose whether you sell all of your property, however it will be below market value as you are still able to remain in your home |
| Will I have to make monthly repayments? | NO, repayments are not required and the interest is continually added to the loan, which increases the amount you owe over time | NO, you live in your home rent-free |
| Do I keep ownership of my home? | YES, you still own the property | NO, the property will be transferred to the reversion provider |
| Can I live in my home for as long as I want? | YES, until you die or move into long-term care. If a couple have taken the Lifetime Mortgage then it is on the second death or move into long term care. | YES, until you die or move into long-term care. If a couple have entered into the reversion agreement, then it is on the second death or move into long term care. |
| Can I move home in the future? | YES, in many cases, so long as the new property meets the provider's criteria. | YES, in many cases, so long as the new property meets the provider's criteria. |
| Do I pay tax on the cash received? | NO, but Equity Release can affect your entitlement to means tested state benefits. | NO, but Equity Release can affect your entitlement to means tested state benefits. |
| Can I still leave an inheritance? | YES, if there is equity remaining in the property, but this depends on the value at the time of sale. | YES, so long as you retained a stake in your property and did not sell all of your home. |