An equity release plan is designed to let you stay in your home until you die or can no longer live there. Moving permanently into care usually ends it, the property is sold and the loan repaid, and the Equity Release Council say no early repayment charge applies. The question worth asking years earlier is what your provider makes of moving in with a relative, because that varies.
A plan lasts until you die or can no longer live there. Moving into care usually ends it, with no early repayment charge, and moving in with family is a question to ask now.
Equity release may involve a lifetime mortgage, secured against your property, or a home reversion plan. It will reduce the value of your estate and impact funding long-term care.
The Equity Release Council describe the design plainly. An equity release plan is meant to let you stay living in your home until you either die or become unable to continue living there. The second half of that sentence is the part worth reading carefully, because it is the point at which the plan ends.
If you move into long-term care and there is no spouse or partner still entitled to live in the property, they say it will be sold and the amount borrowed plus interest is repaid to the provider. Where the plan is in joint names, the survivor's right to remain is what keeps that from happening on the first move.
The Council state that in these circumstances you will not have to pay any early repayment charges, which can sometimes be payable if you decide to re-arrange your plan with another provider. It applies to this situation rather than to early repayment generally.
How early repayment charges work →The Council say some providers will only allow you to move in with a relative if your medical needs require it, and others are not so specific. It is a term of your plan, not a market rule, and it decides whether the plan ends.
When somebody else lives there →Where a spouse or partner is on the plan and still entitled to live there, the property is not sold when the first person moves into care.
Whose names are on the plan →It explains how much time is allowed for you or those acting for you to sell. The Council say the time allowed is typically between six months and one year.
What the executors have to do →If you are still alive when the property is sold and you have appointed an attorney, they can arrange it. That is one of the practical reasons to have a power of attorney in place.
Equity release and a power of attorney →People rarely plan to go into a nursing home. What happens far more often is that a son or daughter offers a room, and the Council put it the same way: you might find you wish to move in with a member of your family, as an alternative to going to live in a nursing home. The question then becomes whether that counts as leaving the property for the purposes of the plan.
The Council are clear that it varies. Some providers will only allow you to move in with a relative where your medical needs require it. Others are less specific. Their own advice is the practical one: if you think it might become a relevant issue at some point in the future, make sure you ask the question and get a clear answer.
Where the plan ends, the property is sold and the loan plus rolled-up interest is repaid. If you are still alive, an attorney you have appointed can arrange the sale. If nobody is making progress, most providers hold a power in their terms allowing them to take over the sale, and the Council note that this is standard across all residential mortgages rather than peculiar to equity release.
The costs of the sale come out of the proceeds, including solicitors' fees, and some providers charge an administration fee for removing their charge at the Land Registry.
Whether your provider treats moving in with family as leaving. That is a term of your plan and only they can answer it.
Anything about paying for care, or how released money affects a local authority financial assessment or a means-tested benefit. Those are questions about your finances and they need an adviser. Our page on benefits explains the shape of the issue without answering it for you.
Anything about paying for care, benefits or a local authority assessment, and what your particular plan permits. The first are advice and need a qualified adviser; the second is a term of your contract and only your provider can confirm it. We are not advisers and we have not seen your plan.
Equity release requires repaying any existing mortgage. Money released, plus accrued interest, would need to be repaid upon death or moving into long-term care.
Every one of these is easier to settle years early than in the week somebody needs a decision.
Questions worth asking the provider while nothing is urgent.
If I move in with my daughter, does the plan end?
It varies by provider and the Council advise asking before it is relevant. Get the answer in writing.
What counts as permanently moving into care?
A long stay in hospital or a convalescence is not obviously the same thing. Ask where the line is.
How long would we have to sell, and from when?
Typically six months to a year, but the contract governs and the start date matters.
Would an early repayment charge apply?
The Council say none applies on a move into long-term care. Confirming it against your own plan costs nothing.
Who can act for me if I cannot act for myself?
An attorney can arrange a sale. Establishing that in advance is the entire reason to have one.
Short answers to the things that come up most. None of it is advice, and every figure on this page carries its source.
The Equity Release Council say that if you need to move into long-term care and do not have a spouse or partner still entitled to live in the property, it will be sold and the amount you borrowed plus interest will be repaid to your provider. A plan is designed to let you stay in your home until you either die or become unable to continue living there.
The Council state that in these circumstances you will not have to pay any early repayment charges, and they contrast that with charges which can sometimes be payable if you decide to re-arrange your plan with another provider. It is worth confirming the position against your own contract, since that is what governs.
It depends on your provider, and the Council are explicit that it varies. Some will only allow you to move in with a relative if your medical needs require this, and others may not be so specific. Their advice is that if you think it might become a relevant issue in future, you should ask the question and get a clear answer.
Your equity release contract explains how much time will be allowed for you or those acting on your behalf to sell, and the Council say the time allowed is typically between six months and one year. Typically is their word, so the contract rather than any general figure is what applies to you.
Then it is not sold at that point. Where the plan is in joint names, the Council say your partner has the right to live in the property for as long as they wish should you die or move into long-term care. The property falls to be sold when neither person on the plan is entitled to live there any longer.
Equity release may involve a lifetime mortgage, secured against your property, or a home reversion plan. It will reduce the value of your estate and impact funding long-term care.
One qualified equity release adviser. They will go through your figures and tell you if there is a better answer. It costs nothing and commits you to nothing.
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