Your Questions About Equity Release

Rates for equity release plans change frequently and depend on the provider. At the time of writing this (Oct 2009) the average interest rate is around 6.8%. The great thing about being a specialist independent adviser is that we can search the market to find the most competitive rate for you.

This depends on a number of factors, including your age, property value, chosen provider and plan. By finding out more about your circumstances, your adviser can search the market and then advise exactly how much you could release. Our customers release an average of £39,000 each.* *Key Market Monitor Oct 2009

The answer to this will depend on your personal circumstances, such as how much you want to release, your age, your property value, and whether you want to secure a loan against your home or sell a share of it. Different plans work best for different people, so I’d always recommend you speak to a specialist independent adviser who will look at all your options.

You actually have two options here. Firstly, you could select a drawdown plan, where you secure a cash fund to draw from as and when you need the money. You only pay interest on the cash you take. Secondly, with some plans you can choose to make monthly repayments, which will reduce the overall size of the outstanding loan.

Make sure your adviser is independent and ideally a specialist in equity release. You should also check your adviser is fully qualified to advise on all types of equity release. All of our independent advisers are fully trained and can only provide advice about equity release once they have received intensive training and achieved their equity release qualification. The induction programme for all our advisers is endorsed by the Institute of Financial Services, School of Finance for our commitment to developing and promoting a high standard of learning. What’s more, if your adviser’s company is a member of SAFER, that means they promise to give you full, personal advice, and a free initial consultation with no obligation. SAFER stands for ‘Specialist Advisers For Equity Release’ and Key is one of the founding members.

At the end of the plan, your home is sold in order to repay the plan provider. If your plan is provided by a member of SHIP, then you’ll have a ‘no negative equity guarantee’. That means that whatever happens to the outstanding amount, there is no way it will exceed the value of your home, and can never leave a debt for your family to repay.

Equity release hasn’t been completely unaffected by changes in the housing market, since the amount people can release depends on their property’s value. The good news is that most people have still been able to release the cash they need, in spite of their home’s reduced value.

Your plan would still be honoured on the same terms. You would not be forced to repay your plan or leave your home.

There are a few providers who will allow this. Again, this highlights the benefits of seeking specialist independent advice, since your adviser will search the market so your options won’t be limited.