Jargon Buster

There are different kinds of advisers who can make recommendations on financial products: Independent Advisers, who can provide advice on products from any lender in the market to offer you the most suitable and competitive product, or advisers who are restricted to providing advice about products from one lender or a panel of lenders.

Some lifetime mortgages have compound interest added, which means that any interest accrued is added to the loan amount and then future interest is charged on top (interest paid on interest).

We offer a consultation (meeting) with a local independent adviser from Key to determine whether equity release would be suitable for you and tell you how much cash you could release. Our initial consultations are free of charge and without obligation so why not reserve your consultation now.

Essentially the same as a conventional lifetime mortgage but allows you to draw down cash in stages when you require it. The main reason for people choosing this is that you only pay interest on the amount of equity released, so interest could accumulate more slowly than with a regular lifetime mortgage.

An early repayment charge is a fee charged by some providers of lifetime mortgages if you decide to pay the loan back early. As the name suggests, lifetime mortgages are designed to last for the rest of your life and are not expected to be repaid until your death.

Equity is the value of your home minus any outstanding mortgage.

An equity release plan allows you to release tax-free cash from your home in the form of a cash lump sum or regular income, with no monthly repayments to make.

Your estate is the name for everything that you own, including your home, possessions and any savings or investments.

Some lifetime mortgages have fixed rates, which means that the interest rate on the plan will never change throughout it’s term no matter what happens to Bank of England base rates.

FSA stands for Financial Services Authority, the body which is responsible for regulating advice and the sales of equity release plans. Their aim is to promote efficient and fair markets, and to ensure that consumers are treated fairly.

An Independent Adviser is independent of any provider and so can search the whole market to recommend the most suitable and competitive plan for your individual circumstances. They must offer you the choice to pay by fee and return the commission from the plan provider to you. If they do not offer this option, then they cannot be independent.

Interest charges are added to a lifetime mortgage, either monthly or annually depending on the individual plan.

When releasing cash from your home with a home reversion plan, you are given a lifetime lease which allows you to stay in your home rent free for the rest of your life.

A lifetime mortgage is a loan secured on your home. Typically no monthly repayments are made on the loan until the death of the last surviving partner or their entry into long term care. Key can offer a wide choice of lifetime mortgages to provide you with a cash lump sum or regular income, or a combination of both.

Monthly repayments apply to conventional mortgages, which have to be repaid over a period of years. Equity release plans, however typically do not require any monthly repayments as they are repaid upon the final sale of the house.

This guarantee comes with all SHIP (Safe Home Income Plans) approved plans and ensures that no matter what happens to property values in the future, you will never owe more than the value of your property.

A personal illustration sets out the details of your recommended plan, and helps you to understand the features and risks. Key provide a personal illustration for all plans after assessing your individual needs.

With a reversion plan part or all of your home is sold to a reversion company in exchange for a cash lump sum and lifetime lease which gives you the right to remain in your home for life. Key are able to offer you a wide choice of home reversion plans.

SHIP stands for Safe Home Income Plans, an organisation dedicated entirely to the protection of equity release planholders and promotion of safe home income and equity release plans. Membership is voluntary but companies who are members of SHIP follow a code of conduct to ensure customer safety.

A solicitor will handle all of the legal work involved when releasing cash from your home. Find out more about solicitors and how they are involved in releasing cash from your home.

State benefits such as pension credit could be affected if you release cash from your home. Your personal adviser from Key will be able to help you to find out whether they would be affected. They also have specialist software to look for ways to reduce any possible effect.

A survey is an inspection of your property which tells the product provider how much your property is worth, and its condition.

If you have released cash from your home already it may be possible to apply for a ‘top-up’ which lets you release more cash.

Some lifetime mortgages have variable rates of interest which means that the interest rate applied will fluctuate depending on the Bank of England base rate or the Retail Prices Index (RPI). So when the base rate or RPI goes up, your plan’s interest rate will increase, and when the base rate or RPI goes down your plan’s interest rate will decrease.