Could equity release help you pay for home improvements? | Personal Finance | Finance

With many of us now looking to make home improvements, the question becomes how to pay for them? In the last three months from July to September, 25 percent of the people who released equity from their home with Age Partnership did so to fund some form of home improvement, a figure that has remained constant across the year.

With a lifetime mortgage, the most common type of equity release, you could release from £10,000 up to 55 percent of the property value, which would be more than enough to cover the cost of some new windows or a conservatory.

What’s more, you continue to own 100 per cent of your home.

In order to release equity, the youngest homeowner must be at least 55-years-old and your home must be worth at least £70,000.

Get advice

An independent equity release adviser will explore all options with you, and will tell you everything you need to know about equity release, including the effect on the amount of inheritance you can leave and if your entitlement to means-tested benefits could be affected now or in the future.

The UK’s largest equity release broker, Age Partnership, provide a free equity release quotation outlining what equity release could mean for you.

You’re under no obligation to proceed with anything that is recommended to you.

Only if you choose to proceed and your case completes would a typical fee of 2¼ percent of the amount released be payable (minimum £1,695).

What’s involved?

Equity release may involve a home reversion plan or a lifetime mortgage, which is secured against your property. To understand the features and risks, ask for a personalised illustration.

Although there are no monthly repayments required with equity release, any money released, plus accrued interest, would be repaid upon death or moving into long-term care.

Popular uses of Equity Release

Imagine receiving a lump sum of tax-free cash to spend how you wish, well equity release can provide you with that opportunity. According to leading equity release broker Age Partnership*, here are some of the most popular uses…

CLEARING A MORTGAGE This is the primary reason that people release cash from their home. It is a condition of equity release to do so and it means that you can benefit from additional disposable income each month.

HOME AND GARDEN IMPROVEMENTS The second most popular use of equity release is to carry out home improvements. After all, once you retire you will have more time than ever to enjoy your home.

NEW CAR Buying a new car outright can bring great peace of mind as it does away with some of the problems and unexpected expenses that come with having an older car.

GIFTS TO FAMILY More and more of us are releasing money from our homes to give a gift to our loved ones.

* Data from VEKA study, June 2020

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