Equity Release

At Bower, we provide equity release advice from the whole market that help our customers to safely access tax free money from the value of their property.

For those wanting some financial freedom to maybe repay and existing mortgage, do some home renovations or go on holiday to enjoy a comfortable retirement. FCA regulated equity release through Bower can provide you a safe way to unlock cash from your home.

What Is Equity Release?

Equity release is essentially a type of long-term loan in the form of a mortgage that is utilised as a way to ‘release’ some of the value of your property without having to sell or move home, whilst having the guarantee to stay there for the rest of your lives or move home. The money released is completely tax free and depending on what type of plan you choose can be accessed as either a tax-free cash lump sum or an equity release cash drawdown as and when needed.

Is Equity Release Safe?

Equity release is a regulated financial product with safeguards in place such as the ‘no negative equity guarantee’ which ensures that borrowers will never owe more than the value of their property. They are also protected by ‘security of tenure’ which guarantees customers the right to live in their property for life or as long as they wish to.

There is also the added peace of mind that unlike a traditional mortgage, with equity release plans there is no risk of repossession and as long as the property remains your main home.

How Does Equity Release Work?

Equity release works by enabling you to access funds from the equity you hold in your property. There are many factors which will influence the amount you can release and the equity release process can be a little complex but the diagram below shows some simplified examples that may help give you a better understanding.

Diagram of equity release influential factors

With no mortgage or secured debt your equity will be greater. However, there are many factors which will influence the amount you can release such as age, health and lifestyle. To get a better idea of how much money you might be able to release, try our free equity release calculator.

If you have an outstanding amount on your mortgage this will need to be cleared either by existing funds or through the process of releasing equity. You can then spend the remaining equity in any way you choose.

Are You Eligible for Equity Release?

Equity release isn’t suitable for everyone and in order to be eligible you must:

  • Be aged 55 or over (youngest applicant if you are applying as a couple).
  • Own your own home worth over £70,000.
  • Live in the UK.
  • The property must be your main residence although there are products for buy to let
  • Be able to pay off any remaining mortgage or secured loan with the equity you release.

What Types Of Equity Release Plans Are Available?

There are two main types of equity release products, lifetime mortgages and home reversion plans.

At Bower, our knowledgeable equity release advisers provide expert guidance on both of these equity release products, as well as advice on both the advantages and disadvantages to help find the best fit for your needs.

Lifetime Mortgage

Aimed at those age 55 and over, a lifetime mortgage allows you to borrow some of your home’s value at a fixed interest rate with no need for repayments, whilst being able to continue to live in the property without having to sell or move and the guarantee of staying in your home.

One of the most appealing parts of this type of plan is that there can be no monthly payments required so you are free to enjoy the lifestyle you want without the worry or burden of repayments. The interest on the loan builds up each year which is called compound interest and both the loan and the interest are repaid from the sale of the home. This happens in the event that you choose to voluntarily pay back the loan, go into long-term care or the last person on the plan passes away.

Interest Only Lifetime Mortgage

Sometimes not known is the fact that you can if you wish, pay the interest only element of the lifetime mortgage which will keep the amount of the loan at the amount first borrowed for the lifetime of the mortgage. Apart from having no increasing debt and hopefully an increasing property value. An advantage of this type of mortgage is that if you wish or need to stop paying,

the mortgage automatically roles into a roll-up mortgage where the interest builds up. However, unlike a normal mortgage you cannot have your house repossessed because you stop paying, making these also a safes mortgages when it comes to the guarantee of staying in your home.

It is important to note that entering into any form of equity release such as a lifetime mortgage, will decrease the value of your estate and therefore reduce how much inheritance you have to leave behind. It could also affect your tax position and eligibility for state welfare benefits. How much this will be, will be explained and shown exactly in writing before any plan is taken out though Bowers advice.

Click here for more on the advantage and disadvantages of Lifetime mortgages.

Home Reversion Plan

Aimed at those over 65, Home Reversion Plans allows homeowners to sell their property or a share of it to a provider in exchange for a discounted lump sum or regular income payments. You retain the right to continue living there rent free until you move out, go into residential care or pass away.

Unlike a lifetime mortgage, there is no interest that needs to be paid and if you keep a share of the property then you will continue to benefit from any increase in value whilst reserving a portion of your property’s value for your family’s inheritance. However, this type of plan tends to be less flexible than a lifetime mortgage and it can be difficult to end or buy back the property down the line.

Click here to find out more about the pros and cons of home revision plans to give you a better idea of what might work for you.

Equity Release Specialists

At Bower our high standards, unrivalled expertise and award-winning equity release advice service are here to help guide and support you throughout your equity release journey.

Our knowledgeable equity release advisers and customer service specialists are happy to talk you through the process, how it all works, if you are eligible and how much money you could release, as well as answer any questions or concerns you may have.

We are keen on our social responsibility mission to ‘go green’ and be eco-friendly and so we are able to offer our comprehensive range of services through a number of different communication mediums all suitable from the comfort of your own home. We are happy to arrange phone calls, emails, video chats or Zoom calls which offer a safe, convenient and environmentally friendly way to deliver our services.

Contact us today to find out more about how equity release can help you access some of the value in your home to spend and enjoy as you wish!