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Myth Busting

Let's look at busting **equity release myths**

The popularity of equity release has grown significantly in recent years but along with this growth, you may be familiar with some common misconceptions around how equity release works.

We know these misconceptions can make equity release seem like a less attractive option to help boost finances in retirement, but let's have a look at some of the common questions we get asked - the answers may surprise you.

Check out these 8 equity release facts

Myth 1: I'll lose ownership of the property

With a lifetime mortgage, you’ll be the owner of your home for as long as you want to live there. With a home reversion plan, the part of it that you sell in exchange for a cash lump sum will belong to the home reversion company. Providing you meet their terms and conditions, you can continue living in your home for as long as you like.

Myth 2: It's unregulated

The industry is regulated by the Financial Conduct Authority (FCA) who aim to protect consumers. The Equity Release Council (ERC) also provides consumer protection specifically for this market. You can rest assured that as members of the ERC we follow their standards of conduct and practice and we only recommend products from providers who meet these.

Myth 3: I can't release equity if I have an outstanding mortgage

Yes you can, but you will need to pay off your existing mortgage balance at the same time. You can use some of the money you release to do this. However, using equity release to repay an existing mortgage could cost you more in the long-term. An equity release adviser would be able to explain this to you in more detail.

Myth 4: I'll have to stay in the same property for the rest of my life

Any equity release product you are recommended by us still gives you the right to move to another property, providing the new home you move to meets the lender’s criteria.

Myth 5: I'll owe more than the value of my home and leave debt to my loved ones

All products we recommend feature a ‘No Negative Equity Guarantee’. This means that when the property is sold after you die or go into long-term care, you’ll never need to repay more than your home is worth, even if this is less than the amount owed.

The guarantee applies to lifetime mortgages, which are a type of loan secured against your home, provided you meet the product’s terms and conditions.

Myth 6: I won't be able to leave my property as an inheritance

With some products you can safeguard a portion of your estate to leave as an inheritance for your loved ones. With a lifetime mortgage the loan and interest is usually paid back when you move into permanent long-term care or die.

Normally your property is sold at this point and the proceeds of the sale would be used to pay back the loan. The loan can also be repaid by other means (if funds are available), as an alternative to selling the property. If the property is sold, then any money left over from the proceeds of the sale, and after the loan has been repaid, can go to your beneficiaries.

With a home reversion plan, you sell part or all of your home to a home reversion provider in return for a cash lump sum. So if you choose to only sell part of your home, then the proceeds from the part you don’t sell can be used to pass an inheritance to loved ones.

Myth 7: It's not possible for me to reduce the outstanding debt

Some lifetime mortgage products give you the option to pay monthly interest. Although this will not reduce the amount borrowed, the debt will not increase as much as it would if you let the interest build up.

There are also products that offer you the option to make partial repayments with no early repayment charges. The amount that can be repaid is usually up to a fixed amount each year.

Some products also offer fixed early repayment charges that apply for a set time period so any repayments after this won’t have a charge.

Myth 8: I won't be eligible

To be eligible for equity release you need to be able to answer yes to the following conditions:

  • You are aged 55 or older (or the youngest applicant is, if borrowing jointly).
  • Your home is in the UK.
  • Your home is of standard construction.
  • Your home is worth at least £70,000.

Minimum age and property value criteria does vary between product providers.

“It was a pleasure to talk to an adviser - I didn't feel intimidated at all. They were very easy to understand and I knew exactly what I wanted to do by the end of the conversation.”

Catherine, from Falkirk





Trusted equity release service

We're here to help you decide if equity release is right for you.

Our expert advisers will provide you with impartial financial advice to find the best solution for your needs from equity release products across the market. If they feel equity release isn't the best option, they'll suggest other possible solutions.

Your initial consultation is FREE and carries no obligation. This means that if you decide that equity release isn't right for you, you can simply leave it there. If you choose to proceed with a recommended product, an advice fee of £1,100 would be payable upon completion.

Key facts about our service

  • Expert, impartial financial advice and access to equity release products across the market.
  • Nationwide appointments.
  • Free state benefits check to make sure you're not missing out on anything you're entitled to.
  • No obligation service, with no pressure to take out an equity release product.
  • UK call centre.

HUB Financial Solutions has been advising customers on releasing equity from their homes since 2006.

We're ready when you are

Whether you have questions about equity release, want to find out more or would like to book an appointment with one of our advisers, our expert team are on hand to help. Call FREE today.

0808 239 8586