What is equity release?
Equity release is a long-term loan that allows homeowners over 55 to unlock tax-free cash from their home. This can be used to clear an existing mortgage, purchase a new property or fund your retirement goals.
There are two types of equity release product, a Lifetime Mortgage and a home reversion plan. A Lifetime Mortgage is the most popular option, as with this, you retain full homeownership.
Who can get it?
An equity release product could be the right choice for you if you:
- Are at least 55 years old
- Want to borrow at least £10,000
- Own or want to purchase a home worth at least £70,000
- Are able to clear any existing mortgage on your property, either using the equity released or additional funds.
Our Later Life Lending Service
Royal London is customer-owned, so you can trust that your needs are at the heart of everything we do. We take pride in offering choice and have made sure that our partners work as hard as we do when it comes to providing the very best service.
We have chosen to partner with specialist broker Responsible Life to deliver the Later Life Lending Service. They have years of experience and success in helping their customers to consider their financial options and use their property to achieve their goals.
Key features of equity release
The cash you release is tax-free
No need to undergo affordability checks
No requirement to make regular monthly payments, although you can make voluntary payments if you wish
Only paid back when the last surviving homeowner dies or enters long-term care, usually by the sale of your property.
Important things to know
- Taking from the value of your home now will reduce the value of your estate in the future
- A tax-free cash injection could affect your entitlement to means-tested benefits
- To understand the features and risks, speak with an adviser.
To find out if equity release could be right for you, Royal London have partnered with later life lending specialists Responsible Life. They have provided the equity release calculator below for you to use. You'll get an estimate of how much you could unlock with a Lifetime Mortgage in minutes, plus a free guide to later life lending.
Talk to our partner Responsible Life
Got a question about your later life lending options? The UK-based Responsible Life team are here to give you the information you need so that you can be sure you choose the right solution for you.
Lines are open Monday to Friday, 9am to 8pm and Saturday, 9am to 5pm, excluding bank holidays.
Or if you prefer, you can schedule an appointment for the Responsible Life Information Team to call you back.
The advice process
Speak to Responsible Life
Call the Responsible Life Information Team, based in the UK
Consider your options with an equity release adviser
The Information Team can arrange a no-obligation appointment with a fully qualified mortgage adviser
Make an application
Your adviser will help you through the application process and every application will receive an extra review from a second qualified expert
Frequently asked questions about equity release
What is equity?
Equity is the value of your home minus any loans that you may have secured against it. For example, if you owned a home worth £300,000 and had a mortgage balance of £50,000 secured against it, your equity would be £250,000.
Can you release equity when you have an existing mortgage?
When considering equity release, you must be able to repay any existing mortgage that is secured on the property. Many people consider using the cash that they unlock to achieve this.
What equity release products can Royal London provide access to?
The Royal London Later Life Lending Service, provided by Responsible Life, will consider Lifetime Mortgages alongside other later life lending products from a range of lenders.
Responsible Life is committed to ensuring that customers get the best outcomes which is why they will only consider Lifetime Mortgages and not home reversion plans if you decide to proceed with equity release, as with this product you retain full homeownership.
Do you need to sell your home with equity release?
No, not if you release equity with a Lifetime Mortgage. With this, you are borrowing against your home, not selling it.
How safe is equity release?
All financial products have an element of risk. However, the equity release industry is overseen by a voluntary trade body called the Equity Release Council who is committed to ensuring that equity release products come with a number of safeguards.
Responsible Life will only recommend Lifetime Mortgages from lenders who are members of the Equity Release Council.
Is it regulated?
Yes, equity release is regulated by the Financial Conduct Authority (FCA).
How much does it cost?
There are several costs that could be involved when considering this product option. As part of the application process, consider whether there will be related fees in having the property valued, costs charged in the engagement of a solicitor, and an application fee charged by the lender. If purchasing a property, then potential stamp duty and conveyancing fees should also be within your thoughts.
When enquiring through our Later Life Lending Service, there is also the advice fee to bear in mind. The advice fee charged will depend on the product that you choose and the complexity of your case, but the provider of our service, Responsible Life, guarantee that it won’t exceed £1,690. By charging a capped rate as opposed to a percentage of the amount borrowed, you won’t pay more simply for wanting to borrow more. The advice fee can be paid with existing funds, or you can choose to add it into the amount borrowed.
More on using your property in retirement
Why release equity from your home?
A look at the reasons some people aged 55 and over would like to release equity from their homes and the pros and cons of doing so.
Equity release explained
Equity release can be confusing. Find out more about what it is, the different types of equity release plans available and the impact it might have on your home.
Three ways to release value from your home
If you are a house owner and you’d like to be able to access some of the cash in your house now, there are various routes to do it. Here’s a quick look at three of them.
Equity release: what is it and is it right for me?
Lifetime mortgage and home reversion plan are two types of equity release available to people aged 55 and above. Find out what they are and which could be right for you.
Do you qualify for equity release?
Equity release can help you unlock the value of your property as a tax-free lump sum. You just need to be aged 55+ and own your property. Find out more.
Equity release - the lifetime mortgage application process, explained
If you’re over 55 and wondering how to release equity from your house with a lifetime mortgage, here are the steps to expect when you apply.
Looking for something different?
If you're not sure whether equity release is for you, there are other later life lending options you could consider instead.
Retirement Interest-Only Mortgages (RIO)
- Unlock value from your existing property or purchase a new one
- Repay only the interest each month with fixed rates available
- Repayable by the sale of your property upon death or entry to long-term care of the last surviving homeowner.
Traditional mortgages for over 55s
- Unlock value from your existing property or purchase a new one
- Make monthly interest repayments or capital and interest payments
- The option to set the term of the mortgage, subject to approval.
Royal London have chosen Responsible Life to provide our customers with advice on Later Life Lending products. The Royal London Mutual Insurance Society Limited has a 30% shareholding in Responsible Life and Responsible Lending (Responsible Group) and are part of the same group under FCA disclosure rules.
If you take out a product recommended by Responsible Life, Royal London Marketing Limited will receive a fee, for this introduction, based on a percentage of the eventual loan. If you would like further details about this fee, Responsible Life will be able to provide you with this. More information about Responsible Life and how your information is processed is available on their privacy notice. Find out how Royal London manages your personal data.
Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority, registration number 302391. Registered in England and Wales number 4414137. Registered office: 55 Gracechurch Street, London, EC3V 0RL.
Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (https://register.fca.org.uk/) under reference 610205. Responsible Life's registered office is: Mills Bakery, Royal William Yard, Plymouth, PL1 3GE. Registered in England & Wales. Company number 716225