What is Money Saving Expert Martin Lewis advice on equity release

What is Money Saving Expert Martin Lewis advice on equity release main image

Money Saving Expert Martin Lewis’ equity release advice explains how to release equity from your home with either a lifetime mortgage or home reversion plan. He looks at alternatives to equity release, the impact this type of mortgage has on inheritance and provides top tips for choosing the best scheme. 

*Content updated May 2022

Who is the Money Saving Expert?

Martin Lewis OBE also known as the Money Saving Expert is the people’s champion where saving money is concerned. Journalist, campaigner, TV and radio presenter, Martin founded MoneySavingExpert.com the UK’s biggest consumer website in 2003 and is now the country’s most searched for man on the internet.

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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.

Martin Lewis equity release top tips

In addition to considering alternative solutions to equity release such as downsizing and the impact it has on inheritance, Martin Lewis offers four tips for those looking to release equity from their home:

  1. Don’t borrow the full amount - only what you need. A drawdown lifetime mortgage gives you flexibility to access your money as and when you need it. You only pay interest on the money you borrow, not on the funds held in reserve, which reduces the size of the loan.
  2. Ensure your lender is a member of the Equity Release Council – so you are protected by their safeguards. Importantly all members of the ERC guarantee you will never owe more than the value of your property. The Equity Release Council 'represents the equity release sector and exists to promote high standards of conduct and practice in the provision of an advice on equity release'. Find out more about the Equity Release Council.
  3. Get independent professional advice – to ensure you make the right decision. Use the services of either an independent mortgage advisor or financial advisor with an equity release qualification.
  4. Check it won’t impact benefits – such as pension or universal credits. Your advisor should be able to help you with this.

What else should you know about equity release

The information provided by Martin Lewis and the Money Saving Experts is useful and easy to understand however some details are missing. For example:

What’s more, the guide looks at the total cost of equity release and impact to your family but it doesn’t take into account the positive affect an increase in house prices could have on the amount you are able to leave as an inheritance.

So, whilst it’s helpful to understand what Martin Lewis thinks about equity release, more information is available through websites like Simply Equity Release, The Equity Release Council and the Money Advice Service.

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