Understanding equity release on jointly owned properties can be difficult, which is why our equity release specialists have put together answers to your most commonly asked questions and how equity release can affect you.
What is Joint Ownership?
Joint ownership is when two or more people buy a property together and the house is in joint names. Whether you are a couple purchasing a forever home, or looking to get onto the property market together, there are many reasons people choose to purchase a home together.
Types of Joint Ownership
There are two main types of joint ownership of homes, joint tenancy and tenancy in common; our equity release specialists have explained what this means below.
The type of joint ownership of your home can help determine what the equity release process might look like if you choose to proceed. Releasing equity can vary significantly depending on the type of ownership, as it often requires mutual consent among owners and can present different challenges based on the ownership structure.
Joint Tenancy
Joint tenancy involves equal ownership of the property, and the right of survivorship applies. This means if one owner passes away, the remaining shares will be given to the surviving co-owner(s). Joint tenancy is often used by married couples or civil partners.
Tenancy in Common
Tenancy in common involves co-owners having separate shares of the property, which can be unequal, and often used by family or couples to wish to keep their portion of the property separate from one another. As the shares in the property are kept separate, when one co-owner dies, their share of the property will be passed to their beneficiaries which may not be the surviving owner.
Equity release for tenants in common properties can be complex, requiring professional equity release and legal advice to understand the implications of equity release and how this will impact your existing shares of the property.
What is the joint ownership equity release criteria?
As a joint owner, any equity release criteria will apply to both parties as you will both be required to be on the equity release application. Both applicants will typically need to meet certain age criteria and fulfil specific requirements to release equity from their shared property, however this will vary between equity release providers.
Equity release typically comes with a set criteria to determine eligibility, this can include:
- You must be aged 55 or over
- The property must be habitable and valued at £70,000 or more
- It must be your primary residence
- Both owners must agree to the equity release plan and sign the necessary paperwork
You will need to seek expert advice to understand the implications of equity release on a jointly owned property. Your adviser will discuss in detail any implications of equity release and the options available to you.
Whilst some complexities can arise, especially if one owner is under the required age or if the ownership structure is defined differently, such as tenants in common, our whole of market equity release advisers will discuss how this can affect the equity release process and future ownership rights.
Learn more about your eligibility for equity release.
Do both partners have to be over 55 for equity release?
In some cases, you may be able to release equity from your jointly owned home if only one person is aged 55 or over. However, if youngest partner is aged below 55, they cannot be party to the equity release plan and will be required to forfeit their rights of residency. This will therefore impact the future of the youngest partner as they will be required to move out when the oldest applicant moves into long-term care or passes away as the property will need to be sold to repay the loan.
During your discussions with your qualified equity release adviser, they will discuss the implications of equity release in detail and will suggest alternatives if they believe releasing equity from your jointly owned home is not the best option for your circumstances.
Request a callback today from one of our qualified equity release advisers to learn more.
How much equity can I release from a jointly owned property?
The amount of equity that can be released can depend on a number of factors including the property value, the age of the youngest homeowner, and the type of equity release plan.
The older you are, or if you have any pre-existing medical conditions, you may be eligible to release more money than a younger, healthier person. However, this will vary on a case-by-case basis, which is why it is important to seek independent expert, qualified advice when considering equity release on jointly owned property.
The maximum amount you can borrow will vary between lenders and the type of plan; however, you will typically be able to release up to around 60% of the property’s value as your lender will need to take into consideration the overall cost of equity release, including the interest that will accrue over the loan’s lifetime.
Get started with our free online equity release calculator to see how much equity you could release from your home.
How Equity Release Works on Jointly Owned Property
Equity release on jointly owned property allows both owners to access the equity tied up in their home without needing to downsize.
The process involves releasing equity from the property, which can be done through various types of equity release plans, such as lifetime mortgages and home reversion plans. A lifetime mortgage is a loan secured against the home, while home reversion involves selling a portion of the home in exchange for a lump sum or regular payments without moving out.
If you have any outstanding secured debts, such as a mortgage, on your jointly owned property, you will be required to pay these off with the funds you release with an equity release plan.
Deed considerations for equity release
Depending on how you choose to proceed, some equity release providers may require changes to the title deeds, including adding or removing names depending who will be named on the plan.
If the title deeds have not updated with both owners, this will need to be corrected with the land registry if you are planning to apply for a joint equity release plan in both names. Any changes that need to be made to the title deeds or land registry may require the clients to take independent legal advice before doing so.
Equity release options for joint tenants
Joint tenants often use equity release for various purposes, such as paying off debts, funding home improvements, supplementing their retirement income, or helping family.
Your equity release specialist will discuss in detail the impact of equity release and which options are suitable for your circumstances.
Costs and fees of Equity Release
Whilst equity release can provide tax free cash to homeowners in the form of a lifetime mortgage or home reversion plan with no obligation to repay the loan immediately, it is important to consider the short and long-term cost of equity release on joint ownership properties.
Equity release will have some initial set-up fees which can include advice fees, solicitor fees and application fees. Your equity release advisor will provide an upfront breakdown of the fees and allow you time to consider carefully if equity release is the right option for you.
In addition to the set-up fees of equity release, there are some long-term costs to consider before taking out an equity release plan. If you proceed with a lifetime mortgage, there will be interest that will accrue over the lifetime of your loan. Some plans will allow you to make monthly repayments or one-off payments to reduce the interest over time.
The interest rate on an equity release loan is typically higher than a standard mortgage, for a more detailed breakdown of what your loan will look like over time, please contact your equity release adviser.
Learn more about the costs and fees of equity release.
Alternatives to Equity Release
Whilst equity release can be suitable for most of our clients, it is not always the best option for everyone which is why we will always recommend an alternative to equity release if we believe it is more suitable advice to suit your circumstances.
Some of the alternatives to equity release can include:
- Remortgaging your property
- Taking out a personal loan
- Downsizing to a smaller property
- Checking your eligibility for means tested benefits
- Utilising pension funds
- Asking family or friends for assistance
At Bower Home Finance, we offer no-obligation advice to help you understand your options and will recommend an alternative to equity release if we believe it is a better solution for your circumstances.
Local independent equity release advice
At Bower Home Finance, we pride ourselves in our personalised, local approach to helping our clients, which is why we have specialist equity release advisers across the UK to help you navigate and understand equity release.
If you are looking to release equity from your property, our team are here to help, from answering any questions you might have, to searching the whole of the market for the right equity release plan for you.
Get started today with our free online equity release calculator or request a callback for no-obligation advice.
FAQ’s
Can you get equity release on jointly owned property?
Yes, you can release equity from a jointly owned property, however the process and paperwork might differ depending on the type of joint ownership and your personal circumstances.
Can you get equity release if you own half a house?
Depending on the circumstances that surround your part ownership you may be eligible for equity release, however this may require the whole property to be in the plan.
You will need permission from the person you share your home with and in some cases, it may be required that you are both named on the charge to proceed with equity release. It will also be required that the property must be the main residence of all applicants involved.
What happens to equity release if one person moves into care?
If you are both named on the equity release plan, nothing will change. With the Equity Release Council’s set of guidelines and plan features, you will have the right to remain in the property until the last surviving partner named on the equity release plan passes away or moves into long-term care.
Can I do equity release if more than two people own the property?
No, lenders limit the number of people that can be on the title deeds and equity release plan. If there are more than two people on the deeds to your home, you may find you’ll need to remove them to proceed with equity release. This will involve independent legal advice for all parties involved.
Can you release equity on a leasehold property?
Equity release may be possible on leasehold properties, but your provider will need to consider the length left on the lease of the property carefully. In some cases, if this is not long enough, they will recommend getting the lease extended if this is possible.
Can you do equity release on a shared ownership property?
Shared ownership properties come with limitations regarding equity release, which you must consider before proceeding. This will depend on the agreement and details of the shared ownership and may not be possible in some cases. For a personalised illustration, please contact your equity release adviser to learn more.
Can you do equity release if your house is in a trust?
No, you will not be able to proceed with equity release if your home is in a trust. To release equity from your home, you will be required to dissolve the trust.
It is important you seek specialist legal and financial advice to help you decide if dissolving the trust and proceeding with equity release is right for your circumstances.
At Bower, we will understand your unique circumstances and advise you to ensure you are receiving the best plan to meet your objectives. There are plans that allow you to make voluntary repayments and move home, subject to lender criteria. However, early repayment charges may apply in certain circumstances.
Equity release requires paying off any existing mortgage. Any money released, plus accrued interest to be repaid upon death, or moving into long-term care. Equity release will reduce the value of your estate and your entitlement to means-tested benefits now or in the future, and impact long-term care funding.
Bower Home Finance provides independent, impartial whole of market advice with an award-winning customer service experience. Initial advice is provided at no cost to you and without obligation. Only if you choose to proceed and your plan completes, would a typical advice and administration fee of £1,695 be payable.
If you are considering equity release, we strongly recommend that you read our equity release page carefully and talk to one of our specialists before deciding if you wish to proceed.
To find out more about any of the products and the service we provide, please call us on freephone 0800 411 8668, request a call back, email us, or join our live chat you’ll find on our website.
Please be aware that equity release may involve a home reversion plan or lifetime mortgage which is secured against your property. All features and risks are thoroughly explained in your free personalised illustration.
