There are two types of equity release, firstly, lifetime mortgage. With a lifetime mortgage, you can borrow against the value of your home releasing a loan which can be used to provide an income, a lump sum, or both. The loan doesn’t have to be repaid until you die or move to alternative accommodation. Interest is usually a fixed rate. It’s compounded monthly and rolled up and added to the outstanding loan and unless you’ve chosen to make the interest payments. Also though, you can take out a home reversion plan in its basic form. All or part of your home is sold to a private company known as a reversion company or group of individual investors. And in return, you receive a cash lump sum, an income, or both. You can remain in the house for a nominal monthly rent for the rest of your life when the property is sold, usually after your death or move into alternative accommodation. Your reversionary receives the proceeds of sale depending on what share of the property you’ve sold.
