Equity release pros and cons
Set out fairly, with no spin in either direction. The benefits are real, and so are the trade offs.
Pros
- Tax free cash from your home without having to move.
- No monthly repayments are required, although you can make them.
- You keep ownership of your home and the right to live there for life.
- A no negative equity guarantee on Equity Release Council plans means you can never owe more than the home is worth.
- You can ring fence some inheritance and, on many plans, move home.
Cons
- Interest compounds, so the debt can grow quickly if you make no repayments.
- It reduces what you leave to your family.
- A lump sum sitting in the bank can affect means tested benefits.
- Early repayment charges may apply if you repay or move outside the rules.
- It is a lifelong commitment that needs advice and family discussion.
The single biggest factor is compound interest. Use the
calculator to see how the balance grows over time before deciding.