What do Money Saving Expert say about equity release?
Money Saving Expert explain that an equity release lifetime mortgage lets you access the money tied up in your home, without having to make monthly repayments. Instead, the money you owe plus interest continues to grow and is only repaid from the sale of your property once you have died.
Martin Lewis and the Money Saving Experts highlight the two ways you can release equity from your home if you are 55 plus, namely with a lifetime mortgage or home reversion plan. He also looks at equity release costs including application and arrangement fees, average interest rates and shows examples of repayment costs.
As the loan is repaid from the sale of your property, the guide also focuses on the inevitable impact equity release has on inheritance. However, Martin believes equity release could be worth considering if you are struggling financially, have money in your property and not precious about leaving everything to family.
It is after all your hard-earned cash.
So does Martin Lewis think you should release equity from your home?
Equity release is not a decision that should be taken lightly, which is why Martin Lewis advises anyone thinking about releasing equity to consider all the options.
Downsizing your home is one alternative to equity release that could free up some cash. Moving to a smaller property, perhaps with fewer stairs that is more suitable to later life could give you the money you need. Martin advises that if downsizing is an option, it’s something you should do sooner rather than later as in his experience, the older you are the less likely you are to move.
Also, if downsizing means a change in location that could leave you feeling isolated, or extortionate moving costs that negate the benefit of moving, equity release may be a more suitable option.