Equity Release

Lifetime mortgages & home reversion plans

Equity release is a method of releasing the value of property, without the individual having to move home. Usually this applies for older people that have either paid off their mortgage or have a tiny mortgage left. This should not be confused with equity withdrawal when people withdraw extra cash from their homes by taking out a further advance or remortgaging.

There are two general categories of equity release product available in the UK today. The lifetime mortgage typically allows an older customer to borrow against the property, and the interest plus capital "adds up so that they are paid back as equity upon death or sale of the property. The second scheme is the home reversion plan under which all or part of the property is sold to a business to acquire a lump sum or income, whilst the person borrowing is allowed live in the property until death, without paying any rent.

The Council of Mortgage Lenders (CML)

Is an industry body representing mortgage lenders in the United Kingdom. Its members consist of banks, building societies and specialist lenders and represent 98% of mortgage lending in the UK.

Safe Home Income Plans (SHIP)

This was created in 1991 to improve the equity release market because of its bad reputation. It guarantees include a guaranteed right to remain living in the property which is the subject of the equity release, either for life or until entry into long term care. Also, there is a vital No Negative Equity Guarantee - which guarantees that the amount to repay the equity release plan on death or entry into long term care can never exceed the value of the property itself, and so no debt can ever be left behind for beneficiaries of the equity release borrower.

Association of Independent Financial Advisors (AIFA)

AIFA represents the IFA profession. They present collective view of their membership to the regulator and those policy makers who have an impact on the IFA market place and the business operation of IFAs.

Get independent advice on equity release mortgages.

Real world advice on banking in the UK

Banking in the UK is highly regulated. There are many different activities that banking in the UK entails, all of which require regulation.

The lowdown on consumer finance

The term "consumer finance" is used to refer to the financial lending process that frequently takes place between creditors and consumers.

Understanding banking law

In the UK, banking laws exist in order to keep the economic and financing industry as regulated as possible and are overseen by various bodies.