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Using equity release as an alternative to downsizing

Releasing equity from your home can help you pay off debts and make improvements to help you stay living in it for longer.

Equity release vs selling your home

The benefits of downsizing as you get older are clear – selling your home to buy a smaller, cheaper place will free up cash and mean you can choose a property that's more suited to you as you get older.

But if you'd rather stay in your current home for longer, equity release could help you free up some money to make renovations without having to move house.

It could be a good option to consider if you don't want to leave your current home and community.

The most popular way of releasing equity is with a lifetime mortgage, which involves borrowing money against your home.

If you do choose to release equity you can of course spend the money however you like, but popular reasons for doing so include:

To make home and garden improvements

To pay for holidays and travel

To pay off debts including mortgages

To give financial gifts to family

Important information

A lifetime mortgage is a loan, so it does build interest which "rolls up" over time. You don’t have to make payments against the loan or the interest, but many lenders have options for you to do so if you'd like to stop the loan increasing.

The loan is paid back when your home is sold either when you die or when you move to long-term care.

There are some myths about equity release that you might have heard. If you are thinking about a lifetime mortgage, it’s important to know:

You stay as the owner of your property

You'll never owe more than your home is worth, so the loan can always be repaid in full when your home is sold

Your home won't be repossessed as long as you follow the lender's terms and conditions

You can still sell your home and move house

Equity release is a big decision, and a big financial commitment. The money you release from your home with a lifetime mortgage can affect your entitlement to means-tested state benefits. A lifetime mortgage will also reduce the amount of inheritance you'll leave behind.

You have to get advice to apply for equity release

You must speak to a qualified equity release adviser before you can release equity in your home. They will help you to understand if equity release is right for you and they'll help you to find the right product for your needs.

Our qualified, experienced advisers at OneFamily Advice will ensure that you clearly understand the implications of equity release, and will take the time to understand your individual circumstances before making their recommendations. They don't work on commission, so they only have your best interests at heart.

You can have a free, no obligation chat to find out whether equity release could be the right option for you. Then, if you decide to proceed, we charge a single advice fee of £950 on completion - no matter the size of your loan.

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See how much equity you could release by entering your details below.

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Important: The loan amounts above are an illustration of the amount you could borrow. The actual amount may vary depending on your individual circumstances. The figures are not guaranteed and do not constitute an offer to lend.

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We have a series of articles available to help you decide if equity release and lifetime mortgages are the best option for you.