Reducing financial pressure in later life
How some homeowners use equity release to clear debts and simplify finances.
A Lifetime Mortgage will reduce the value of your estate and may affect your entitlement to means-tested benefits and tax status. The impact of not servicing monthly interest payments on a Lifetime Mortgage is that the outstanding debt can grow rapidly, thus reducing the value of your estate. For example, if the interest rate was 7% a year, a £50,000 loan would double to £100,000 after 10 years assuming no repayments are made. This is an example for illustrative purposes only and personalised advice and recommendations should be sought from a qualified professional. You are strongly advised to register a lasting power of attorney. This will allow your affairs to be managed by somebody else if your mental abilities significantly decline.
Carrying debt into retirement can place unnecessary strain on your finances, particularly if income reduces or becomes fixed.
Some homeowners explore equity release as a way to clear existing debts such as credit cards, loans, or outstanding mortgages.
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While equity release can reduce monthly outgoings, it is not a short-term fix.
Important considerations include:
This is why independent advice is essential before proceeding.