Is equity release a good idea?

Equity release can be a sensible choice for some people and the wrong choice for others. The honest answer is that it depends on why you need the money, what the alternatives are, and how it affects the people who would otherwise inherit your home.

When equity release can be a good idea

• You want to stay in your home and have no realistic wish to downsize.
• You need income or a lump sum in retirement and have little other savings to draw on.
• You have an interest only mortgage ending with no way to repay the capital.
• You want to help family now and understand the effect on your estate.

When it is usually a poor idea

• You only need the money for a short time. The long term interest makes it an expensive way to borrow briefly.
• You are likely to move or downsize soon anyway.
• Releasing cash would cost you means tested benefits worth more than you gain.
• You have not discussed it with the people who expect to inherit.

Alternatives to weigh first

Before equity release, a good adviser will look at downsizing, a retirement interest only mortgage, using other savings or pensions, and help from family. Equity release should be the answer only when these have been considered and ruled out.

See what the interest does over time with the release calculator, then read the full pros and cons.