Equity release is repaid when you die or move into long term care, usually from the proceeds of selling your home.
With a lifetime mortgage, you remain the legal owner of your home. When the time comes, your legal representative or executor will need to sell your home and pay off your equity release loan, plus all the interest that has accrued over the year. To make sure they get the best price, the lender will usually allow 12 months to sell the property.
Any balance left over can be used to pay your care home fees or be added to your estate and distributed according to your will.
With a home reversion plan, the equity release company becomes the legal owner of all, or part of your home and it is their responsibility to sell it. When the time comes, this will usually be done with about two months.
If you only sell part of your home to the equity release company, either you or your beneficiaries will receive the full market value of the percentage you still own.
If you sell 100% of your home to the equity release company, neither you nor your beneficiaries will receive any of the sale proceeds.