General Questions

  1. Am I eligible for equity release?

    • The youngest applicant (if you apply in joint-names) must be 55 or over
    • The property must have a minimum value of £60,000
    • Potentially, plans are available for properties valued up to an unlimited sum
    • The property to be used must be your main residence and in England, Scotland, Wales or Northern Ireland
    • If the property is leasehold, the minimum unexpired term must be at least 75 years (although you may be able to extend this)
    • Local authority property must be outside the discount period
    • You must be able to raise enough money to repay existing secured loans or mortgages
    • Note that some plans have tighter rules. So, for example, the minimum age might be higher than 55 and the minimum property value might be higher than £60,000.

    Answers to this checklist do not guarantee that an application will be accepted

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  2. How much equity can I release?

    Try our simple calculator to discover how much cash you could raise:

    The amount you can raise depends on your age(s) and the value of your property. Amounts differ greatly from provider to provider so it's essential to take independent specialist advice to get a clear picture of the amounts that are available to you and the terms.

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  3. Is Cavendish Equity Release a member of SHIP?

    In 2013 SHIP (Safe Home Equity Plans) was incorporated into the Equity Release Council (ERC). The Equity Release Council retains the SHIP standards for Equity Release plans, and all our advisers are members of the Equity Release Council. More information about the council can be found at www.equityreleasecouncil.com.

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  4. Will an equity release plan affect my state benefits?

    If you are receiving means-tested social security benefits, such as Pension Credit or Council Tax benefit, you may find the additional income or capital raised from an equity release plan might affect your entitlement to these benefits now, or your ability to claim in the future.

    As part of our fact-find process, our adviser will carry out a benefit health check for you, if appropriate, using a specially designed computer system. They will then consider whether your entitlement to means-tested benefits will be effected. Your entitlement to State Pension will not be effected.

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  5. How may taking an equity release plan affect my family?

    As well as being a major financial decision, whether to use your family home as security for an equity release plan can also be an emotional decision to make. For many people, the desire to leave their property to their children can be a barrier. Others feel that they can do more to help their family now by raising money from their property and seeing the benefits for themselves. The final decision to take out an equity release plan should be yours, but Cavendish Equity Release strongly recommends that you consult your family before proceeding. These plans do reduce the value of the estate you will leave to your family and even though it will result in a higher standard of living for you now, their opinion might affect your decision.

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  6. If I take out an equity release plan, what fees are there?

    You don't pay anything until you've taken out a plan and received your money. Any fees you pay are advised to you before you have to sign any papers committing yourself to a plan. The fees reflect the professional expertise required to ensure you have the most beneficial plan for your needs and circumstances, to value your property accurately and independently, to legally arrange the scheme with your best interests in mind and to cover administration costs.

    Valuation fees

    Once you've decided to go ahead with a plan your property will have to be professionally valued in order to calculate accurately how much you could raise. This is normally the only fee you have to pay in advance. The higher the value of your property, the higher the fee will be. The cost can vary, for example, for a property estimated at £200,000 the valuation fee could be between £180 and £400. This may also include an administration fee for the plan provider.

    If you have difficulties in finding the valuation fee, Cavendish Equity Release offer a special scheme that allows you to spread the cost over a number of months or to pay by credit card.

    If you change your mind before the valuation has been carried out, you will normally have your valuation fee refunded in full. However, with some mortgage plans the valuation fee includes a charge to cover administration costs and this will be deducted from the amount refunded. The amount of the administration fee differs from plan to plan but it can be between £50 and £250.

    Legal fees

    When you have chosen a solicitor to act on your behalf, it's important to obtain an estimate for their services. Legal fees are usually around £395 to £600 plus VAT and costs and expenses. If you do not have a solicitor we have a number of firms who specialise in equity release cases that you could choose from.

    Application fees

    Application fees vary from plan to plan but can range between £295 and £995. Some plan providers will allow the application fee to be added to the loan. If an application fee is charged, the amount should be clearly shown in the plan literature.

    Arrangement fees

    Cavendish Equity Release typically charges an arrangement fee of 1.5% of the amount released with a minimum £849. This applies to lifetime mortgages and home reversion plans (VAT is only payable on the fee for a home reversion plan). However, please note that with some plans we receive sufficient commission from the plan provider to enable us to arrange the plan for you fee free. These fees are only payable on completion.

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  7. Will I still be liable for repairs to my property?

    With all plans you are responsible for maintaining your property in reasonably good condition. You will not be required to improve or modernise it. Equity release companies have the right to expect your property is kept to a certain standard, and carrying out basic repairs is usually a requirement of the contract (this is exactly the same as a conventional mortgage).

    Some plan providers will not accept properties unless they are in good condition at the time you apply. This means that if your property needed any major repairs you would have to find the money to pay for them before you applied. When you apply for a plan your property will be inspected by a valuer or chartered surveyor. The valuation report will state whether any repairs are needed. If they are not extensive, it is generally possible for repairs to be carried out after the completion of the plan, although part of the payment you'll receive may be retained until the repairs are completed.

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  8. What happens if I apply with my partner and one of us moves into long-term care or dies?

    Any equity release plan recommended by Cavendish Equity Release gives both applicants the legal right to live in the property until they voluntarily decide to leave it, or until their death.

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  9. I have let part of my property to a tenant. Can I still apply?

    Some providers will allow you to let part of the property under certain circumstances. Cavendish Equity Release will be able to advise you on this.

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  10. I have a carer, companion, or a member of my family (not my partner) living with me. Can I still apply?

    Yes, some providers will accept applications in these circumstances. However, anyone who is living in your property and is not named in the agreement will not have the right to live there after your death or if you leave the property. They will have to take independent legal advice and then sign a consent form that precludes any right of occupation after your death or if you leave the property.

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  11. What happens if I want to raise more money later on?

    This will depend on which plan you have done and the value of your property. Cavendish Equity Release will be able to advise you on a further part reversion or a top up loan.

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  12. Can I use equity release to help me buy a property?

    Yes you can use some equity release plans for this purpose. The amount you can raise will be based on your age(s) and the value of the property you are buying.

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  13. Can I release equity from a second property?

    Equity release plans are normally only available on your primary residence. However, there is a plan available that allows you to release equity on a second home in the UK. Cavendish Equity Release will be able to advise you on your options.

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Reversion Questions

  1. How long does completion take?

    It generally takes the same length of time as if you were selling your home in the normal way through a local estate agent (2 to 3 months). Some reversion companies buy your property themselves. Others go to the investor market to try and obtain the highest possible price for you. If you use an open market reversion company it may take a little longer as the company will need a little time to market your reversionary interest and find whichever plan provider will pay the highest amount. It can also take considerably longer if your solicitor is not familiar with equity release schemes.

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  2. Can I move?

    Yes. The lease agreement from all reputable reversion plan providers includes a clause that allows you to move subject to your new home meeting the property suitability criteria applicable at the time.

    Each reversion company has different conditions regarding moving to another property so you should check these before you go ahead with any plan.

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  3. How does a part reversion work?

    You sell only part of the equity in your property. You still own the remaining equity so you, or your family get the benefit of any future appreciation in the value of the part you retain. At a later date you can sell the reversionary interest in the part you retained, or leave it to your family.

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  4. Why don't I receive the same amount as my property is valued at?

    As you will be living in the property rent-free (or only paying a nominal rent of around £12 a year) and as the plan provider may not be able to receive any return on their investment for many years, the purchase price is discounted to allow for this. In effect you will be selling your property for its full market value, less a single payment that represents your rent for the years it is estimated you will be living there.

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  5. Who is responsible for maintaining the property?

    Although you no longer own the property, or only own part of it, you remain responsible for maintaining the property just as you do now. The amount you receive has been calculated after allowing for this. If the plan provider had to maintain the property, this would have to be factored in when calculating the amount you would receive and you would receive less.

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  6. Who pays the ongoing expenses after I've taken out an equity release plan?

    With all plans you will continue to be responsible for repairs and maintenance of your property. You will normally also have to pay all outgoings such as buildings and contents insurance premiums, Council Tax and utility bills. There are some exceptions. Some plan providers will include free buildings insurance and one will pay for any major repairs that may be required in the future.

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  7. What rent will I have to pay and what happens if I forget to pay it?

    Reversion plans are specifically designed to give you guaranteed lifetime occupation of your property. To give you full legal protection throughout your life, you will be granted a lease which is normally for 99 years. The lease will normally state that an annual rent is payable. Each company's lease is different. The rent will normally be a peppercorn (in practice, nothing), £1, £10 or £12 a year. In most cases rent is not requested or collected, but you may feel more secure if you pay it each year whether or not it is asked for. You can send a cheque or arrange for it to be paid by a Standing Order. If you forgot to pay it, or your cheque was lost in the post, or your bank did not pay the standing order, you would NOT forfeit your lease. You would have many opportunities to pay it and there is no possibility that delayed payment would affect your occupancy.

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  8. Who decides what repairs are required?

    The lease agreement allows the plan provider to have the property inspected occasionally by a chartered surveyor to ensure the property is kept in reasonable condition. The report will tell the plan provider if any essential repairs are required. ??Some plan providers never inspect the property. They rely on you to maintain the property and make any repairs that you think are needed.

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  9. Does the plan provider have the right to check that we are maintaining the property?

    Yes, they may want to be sure it is being kept in reasonable condition. However, this does not mean that any improvements or modernisation is required. Your only liability is to keep the property in reasonable condition just as you probably do now. One reversion plan provider will pay for any major repairs such as a new boiler, window replacements or roof repairs.

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  10. Can the new owner try to force us out?

    No. You have legally guaranteed lifetime occupancy under your lease agreement and a copy is registered at HM Land Registry. Provided you comply with the terms of the agreement, you and anyone else named in the agreement has guaranteed occupancy for the full term of the lease. ??In addition, as a tenant there are very strict laws that give you full protection against any form of harassment. Under the Protection from Eviction Act 1977, any landlord who is indicted for attempting to deprive the residential occupier of his/her occupation of any premises, would be liable to an unlimited fine and/or two years imprisonment. Under Section 1(3) of the Act, any landlord who is guilty of any act likely to interfere with the peace or comfort of the residential occupier, is guilty of an offence.

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  11. Who pays for buildings and contents insurance?

    As a condition of the plan you must continue to insure the building. With some plans, you continue to pay the insurance premiums and ensure that the interests of your plan provider are noted on the policy. With others the plan provider will arrange the buildings insurance and then bill you for the premiums. ??Your equity release plan does not affect your contents insurance.

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  12. I am applying with my partner. Do we both have guaranteed security for life?

    Yes, any one named on the lease agreement has legally guaranteed occupancy for the full term of the lease. This is normally for 99 years.

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  13. If my property is valued higher than my estimate, does this increase the amount paid to me?

    Yes. Initially you are asked to give your own estimate of your property's value so the amount you are likely to receive can be calculated. This is so that, when you receive the estimate, you can decide whether or not you still want to proceed. If you decided the amount is not sufficient, you can withdraw your application and you will have saved paying a valuation fee. If you are satisfied with the estimated amount, your property will then be valued by a professional valuer. The valuation will then be used to calculate the final amount you will receive. This could be higher or lower than the original estimate. If your property is valued at a higher amount than you estimated, you can expect to receive a proportionally higher amount. If it is valued at a lower figure, you will receive a proportionally lower payment.

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  14. Who holds the deeds?

    Since October 2003, all property transactions and subsequent interests in property are recorded at the H M Land Registry. Instead of physically holding the deeds, anyone with an interest in land or property will simply receive a certificate stating their interest.

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  15. What do I do about a solicitor if I haven't got one?

    All reversion companies, reversion brokers, or your adviser will normally be able to recommend a solicitor who is experienced in this type of transaction. Alternatively you can obtain a list from Cavendish Equity Release.

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  16. How long do our relatives have to remove our possessions on our death?

    Your relatives will be given 28 days to clear your possessions from the property. If, for any reason this is insufficient, an extension would normally be agreed.

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  17. What happens if I sell the reversionary interest in my property and the plan provider is declared bankrupt or dies?

    This will not affect you in any way. No matter who inherits or buys the reversionary interest in your property from the original plan provider, they are legally required to honour the terms of your lease agreement. This specifically states your legal right to occupy the property for the full term of the lease.

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Lifetime Mortgage Questions

  1. What happens if I want to repay the loan early?

    Equity release plans are intended as long-term commitments, not as short-term loans. The loan, plus any interest which has been added, is generally repayable on the death or long-term care requirements of the last plan holder. Some lenders will not accept partial repayments of the loan. Normally, if full repayment of the loan is made within a certain period of time, an early repayment charge is payable. The amounts and periods vary from plan to plan, but with some, the amount can be substantial. Advice should always be sought from Cavendish Equity Release if you are considering early repayment.

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  2. How long does completion take?

    It can be as little as 3 or 4 weeks, but normally it will take about 6 to 8 weeks on average. If there are any complications, or if your property is not registered, it may take longer. It can also take considerably longer if your solicitor is not familiar with equity release schemes.

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  3. Can I move?

    Yes. You can move at any time. With some providers you can transfer the loan to your new property or you can repay the loan from the sale proceeds. As long as the property is suitable security, you can then start a new loan, which is secured on your new property. However, you should bear in mind that if you move to a lower value property, you may need to make a partial repayment and in some circumstances early redemption charges may be due.

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  4. How long do our relatives have to repay the loan on our death or moving into long-term care?

    Depending on the plan provider, this can be up to 18 months. Interest will continue to be added until the property is sold.

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Case Studies

Roll-up Cash Lump Sum

Constance is 65 and has a property worth £750,000 with no mortgage. She takes out a cash lump sum lifetime mortgage of £100,000 with an interest rate of 6.35%*. The overall cost for comparison is 6.4% APR. The interest rate is fixed for life and is added annually.

Constance dies 15 years later, by which time the total loan is £257,184. That's the original £100,000 loan plus the accumulated interest. If her house had increased 1% in value per year, it would be now worth £870,727. When the house is sold and the loan repaid Constance's estate will receive £613,543.

*the actual rate available will depend on your circumstances. Ask for a personalised illustration.

Roll-up Drawdown

Norman is 65 and has a large detached property worth £300,000. He takes a drawdown with an initial lump sum of £20,000 and a cash facility of up to £80,000 available for up to 15 years. The interest rate is 6.5%* and the overall cost for comparison is 6.6% APR. The interest rate is fixed for life and added annually.

5 years later Norman needs an additional £10,000. He dies 10 years later, by this time the amount borrowed is £30,000. The total loan plus interest that must be repaid is £70,208. If Norman had taken the full £30,000 in one lump sum at the beginning, the total loan and interest would be £77,155.23.

* the actual rate available will depend on your circumstances. Ask for a personalised illustration.

Interest Only Lifetime Mortgage

Albert is 65 but still running his own business with no plans to retire. He has a property worth £170,000. He takes an interest only lifetime mortgage of £20,000 at 6.5%*. The overall cost for comparison is 6.6% APR.

After 10 years Albert decides to retire and chooses not to pay the monthly repayments on his interest only lifetime mortgage, so he converts it to a roll up mortgage. After 10 more years Albert dies owing £37,543. If Albert had chosen to retire at 65 and take the £20,000 as a lump sum initially he would now owe £70,473.

* the actual rate available will depend on your circumstances. Ask for a personalised illustration.

* Please note that these are only examples and the value of your house could go down or not increase at the same rate. Cavendish’s experts always ensure that there is a no-negative equity provision