The Best Equity Release Companies: Which One Suits You?
There are several factors that you need to take into consideration when choosing an equity release company. These include the cost, the type of equity release plan available and whether or not they offer mortgages with interest-only repayments. Therefore, it is important to choose carefully as this could be one of your biggest financial decisions. This article will discuss some of the best companies and explain why they might suit you better than others.
Learn more: What is Equity Release
Top Equity Release Brands Worldwide
2 Types of Equity Release Plans or Schemes in the UK
There are two types of equity release plans available in the UK: lifetime mortgages and deferred payment agreements.
Main Article: Lifetime Mortgage
A lifetime mortgage is a type of secured loan that will have you pay back less than the full amount at any given time so long as your property has increased in value. This means that if you sell or remortgage later on, then this difference can be covered by selling some more shares from your home to cover it. However, the problem with these types of mortgages is the costs involved, which may often outweigh what you could make by remortgaging.
Deferred Payment Agreements (DPAs)
A DPA is a form of equity release mortgage that lets you sell up part or all your property in return for payments over time, usually 25 years. The upside to this type of agreement, though, is the low cost and easy way it can be done through an independent broker who will then arrange everything on your behalf, including finding out what’s needed should something happen with your health before repayment was due to finish which would otherwise leave you without a home.
However, the downside to a DPA is that the interest rate will be higher than other types of equity release mortgages. In addition, you’ll have to provide evidence that there’s enough money in your pension or savings account with an independent broker, which can make it difficult for those who are self-employed.
You would also need to pay both arranging costs – typically £995 upfront followed by monthly payments, as well as fees when negotiating with lenders, which at today’s rates are about 0% on average. However, they vary depending on how much you stand to gain through remortgaging your property. Suppose negotiation isn’t something you’re comfortable doing yourself. In that case, this could cost more in total than using a specialist mortgage advisor instead.
Top 8 Lifetime Mortgage Providers
Aviva is a specialist provider of lifetime mortgages and offers a range of products to suit different needs. They will offer loans for 100% or more of the property’s value in some cases, with repayment terms set up over 25 years so that you only have to pay back your mortgage each month until 25 years after it was first taken out.
Hodge Lifetime Mortgages offers various products to help you release some equity from your property, with repayment terms set over 15 years. This could be the best choice for people who want to have greater control over how their money is used but still enjoy low-interest rates and monthly repayments affordable on a fixed budget.
Just retirement is a specialist provider of home-to-home loans and lifetime mortgages aimed at those looking for an affordable way to release equity from their property. They can offer a range of products with repayment terms from 25 to 40 years, so you have the choice of an affordable monthly instalment for longer if that is what you need.
Liverpool Victoria is a specialist provider of home-to-home loans. They can offer a range of products with repayment terms from 20 to 35 years, so you have the choice of an affordable monthly repayment for longer if that is what you need.
Legal & General
Legal & General is a specialist provider of lifetime mortgages aimed at those looking for an affordable way to release equity from their property. They can offer products with repayment terms from 25 to 50 years, so you have the choice of an affordable monthly payment over a longer period if that’s what you need.
They also provide additional services such as fixed-rate home insurance and life cover through Legal&General Insurance, so your finances are all taken care of in one place.
More2Life is a specialist provider of equity release mortgages for over 55s, offering products with repayment terms from 25 to 50 years. They have been providing home loans and insurance cover since 1986, so you can be confident that they will take care of your finances as well as the rest of your life.
They also offer advice on selling down or downsizing if you are looking to move somewhere smaller in later life.
OneFamily offers equity release loans with terms of between 25 and 50 years, based on the borrower’s age at application.
They also offer additional services such as retirement planning advice from independent financial advisors, fixed-rate home insurance cover through Legal&General Insurance and life cover for mortgage holders aged 75+, all in one place.
Pure retirement offers equity release loans with terms of between 25 and 50 years based on the borrower’s age at application.
OneFamily charges a higher fee than Pure Retirement. Still, there are no limits to the amount you can borrow (although interest rates depend on your income).
Both One Family and Pure Retirement will provide analysis tailored to individual circumstances so that customers have an accurate idea about how much they will need now, what might be needed later on in their lives – or if it is better not to take out any equity release plan at all.
Top 16 Home Reversion & Retirement Mortgage Providers
Bridgewater offers a home reversion plan, which means you can take out an equity release loan and then return your property to the lender at no cost when it is time for you to move into residential or nursing care.
You will need £150,000 to qualify for this scheme. Still, Bridgewater Forge says they provide more affordable rates than other providers.
Crown is a mortgage company that provides equity release loans and provides this service for over 100 years.
This provider offers plans with repayment periods of up to 25 years, which means they are the best providers for those looking for an affordable plan. However, you will need £250,000 to qualify for their scheme.
Bank of Ireland
Bank of Ireland offers equity release loans with repayment periods that vary between five and 25 years, which means that you can choose the plan that is best suited to your needs.
However, this provider does not offer any plans for those who have a property value below £150,000, so Crown would be the better choice if it falls into these price brackets.
Beverly Building Society
Beverly offers equity release plans with repayment periods of between five and 25 years, as well as several other features that make them one of the best providers for those looking to move or downsize.
The minimum property value required to qualify is £100,000, which means they are an affordable option for most people.
Buckinghamshire Building Society
Buckinghamshire offers a wide selection of equity release plans for those looking to move or downsize.
The minimum property value required to qualify is £100,000, which means that they are affordable for most people. In addition, they have repayment periods ranging from five years up to 25 years which also makes them one of the best providers on offer.
Family Building Society
Family Building Society offers a range of equity release plans to suit your needs.
The minimum property value required to qualify is £100,000, which means they are an affordable option for most people and have repayment periods ranging from five years up to 25 years so that you can make the most appropriate decision. They also offer part-exchange on properties where there is some equity available and drawdown options if you need more income at any time.
Hanley Economic Building Society
Hanley Economic Building Society offers an over 55s mortgage review service so that customers can keep track of their position regarding equity release facilities at all times, which means no one will find themselves without access when it’s needed most!
Hinckley and Rugby Building Society
Hinckley and Rugby Building Society offers a range of equity release products to suit all types of clients. They also offer part-exchange on properties with some available equity, so you may not need to sell your property to take advantage of this service.
The building society has an excellent reputation for providing exceptional levels of customer service. It is committed to ensuring that every client’s needs are met – no matter what they might be.
Hodge Lifetime Solutions is a specialist equity release provider that prides itself on providing all the information and support you need to make an informed decision. In addition, the company offers lifetime mortgages, bridging finance, and home reversion plans – so there’s something here for everyone!
The service they offer is ideal if your family has been affected by divorce or bereavement. It can provide financial relief to those who are struggling financially due to these life events. It also provides one-off grants of up to £20,000 in emergencies such as hospital treatment of illness or injury.
Ipswich Building Society
Ipswich Building Society offers a lifetime mortgage that will release equity in your home to provide you with the funds needed – and they’re one of the UK’s leading providers.
Their products are tailored for people who want to make their family feel more secure by having money available if any emergencies arise and those who would like to be able to spend time on holiday or look after older relatives without taking out cash from other savings.
Leeds Building Society
Leeds Building Society is a leading provider of lifetime mortgages and other home loans.
Their Lifetime Mortgages offer affordable monthly payments, flexible terms that could be repaid earlier without any penalties or additional interest charges and the secure knowledge that you’re not tied to your property forever.
This type of mortgage can be ideal for those who want to have access to the cash they’ve built up in their homes but don’t want to sell it – as well as pensioners wishing to move somewhere more manageable with lower bills like sheltered accommodation.
Mansfield Building Society
Mansfield Building Society offers a Lifetime Mortgage option that you can apply for at any time as long as your mortgage balance is £100,000 or less.
The product provides monthly repayments and offers an extended repayment period with no early redemption penalties to help reduce interest charges.
A lifetime mortgage could be ideal if you want access to funds from your home but don’t wish to sell it.
Plus, because Mansfield Building Society is one of the UK’s largest building societies, they can review how much equity in your home you have before purchasing. So instead of paying off absolutely everything up front, they’ll purchase what they need from other sources first (which means there’s usually more cash available).
Marsden Building Society
The Marsden Building Society has a lifetime mortgage option with monthly repayments fixed for the loan’s life.
This means you’ll know in advance what your monthly repayment will be – so there’s no risk of worrying about how far into retirement it is and whether or not you have sufficient funds to cover expenses.
It also offers an extended payment period, which can help reduce interest charges on your equity release deal.
Newbury Building Society
Newbury Building Society offers equity release loans with a repayment period of up to 25 years. Hence, if you find that the cost of living is increasing at an alarming rate, it’s leaving less money for your monthly outgoings, then this could be the product for you.
It also has lower interest rates than many other providers in the UK – which can help ensure more capital stays within your estate for future generations.
Penrith Building Society
Penrith Building Society is a provider of equity release mortgages with both fixed and lifetime interest rates.
Additionally, Penrith offers some great benefits, such as being able to invest in your local area or business through the company’s share-saving scheme, which can help you save on stamp duty while also retaining full control over how much money goes into it each month.
Scottish Building Society
Scottish Building Society offers a range of equity release mortgages with both fixed and lifetime interest rates.
Their mortgage can be combined with other products for those who need help to pay off their debts. Still, it’s also ideal for people looking to spend more time at home without worrying about where they will get money from next month or even in future years.
Swansea Building Society
Swansea Building Society’s equity release mortgages allow you to unlock some of the money that has been invested in your home.
The rate is one of the lowest on offer. In addition, it offers a lifetime interest rate and lower monthly payments than other providers.
It also provides flexible repayments, so there are no penalties for repayment even if you need time off work or spend more time with family before returning to full-time employment.
This company is ideal for those who don’t mind paying a slightly higher mortgage fee in return for greater flexibility over how they pay their loan each month.
Tipton and Coseley Building Society
Tipton and Coseley Building Society has a range of equity release mortgages to suit different budgets.
The rates are competitive, and it offers lifetime mortgage interest guarantees and flexible repayment plans for people who might need time off work or wish to spend more time with family before returning to full-time employment.
It also provides home improvements grants to your next property purchase should you decide an upgrade is in order!
This company is ideal for those on a budget looking for flexibility over how they repay their loan each month while still receiving quality service from a trusted provider.
High Street Banks & Lifetime Mortgages
There are several high street banks that offer equity release mortgages.
HSBC and Lloyds Bank both provide flexible repayment plans where you can pay back some, all or none of your mortgage interest each month, depending on what suits your financial circumstances best.
This is ideal for those who know they will have a higher income one year but lower the next as it means payments don’t fluctuate quite so much! HSBC’s rates start at just over six per cent, while Lloyds’ begin from around five per cent with no early redemption penalties if you want to sell up during the lifetime of the loan.
Suppose you’re looking for an affordable monthly payment. In that case, Barclays offers a range of Lifetime Mortgages starting from £400 might not have any other way to do so. Equity release is an option for those who find themselves in a situation where they cannot fund their retirement without it and can be attractive because there’s no need to pay back the debt until you die or sell your house.
How Do I Choose an Equity Release Company?
Look for a company that has an established reputation in the industry. Check what security is offered to protect your home from defaulting on repayments and having you lose it.
Find out how much they charge in fees to not be surprised by future costs, which can be hefty.
Is Equity Release Companies Safe?
In general, an equity release is a safe option so long as you can meet the terms of your agreement.
How to Find the Best Equity Release Company?
Refer to the Equity Release Council for a list of companies you can consider.
Which Equity Release Companies Should You Avoid?
You should avoid companies that have just started in the industry, those with a history of defaults and bankruptcies or those who do not offer security to protect your home.
Some equity release companies allow you to defer payments for up to 25 years which can be helpful if you want more time before having to start repaying the loan.
Equity release is a way for older people to access their home equity when they are struggling financially. The best companies will offer you advice on how much your home is worth in today’s market and provide complete transparency about the costs involved in using this type of financing option.