A home reversion plan means selling all or part of your home to a provider and living there as a tenant. There is no loan and no interest, so nothing grows, and you know exactly what share remains yours.
You sell part of your home rather than borrowing against it. Nothing compounds, and you know exactly what is left. That certainty is the product, and it is paid for with a discount.
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 Council's Standards page says that reversions have their own separate product standards, set out in another document. We have not opened that document, so this page does not list them. If you are considering a reversion, ask your adviser for the reversion standards specifically rather than the lifetime mortgage ones, because they are not the same and the five on our lifetime mortgage page do not necessarily apply.
Four things, and the first one is the difference everything else follows from. The minimum age is commonly 60 or over, higher than the 55 typical for a lifetime mortgage.
The provider buys all or part of your home. There is no loan, so there is no interest and nothing compounds. That is the fundamental difference and everything else follows from it.
Substantially less, because the provider does not get their money back until you die or move into care, and they do not know when that is. The discount is how they are paid.
Usually rent-free for life under a lease. Your name is no longer on the deeds for the share you sold, which is a real change in how you hold your own home.
They own their share, so if the property rises in value, their share rises with it. If you sold half, half of any future growth is theirs.
It suits a small number of people, and the usual case is somebody who wants certainty about exactly what they are leaving behind. Sell 40% and 60% is yours whatever happens: no debt growing, no arithmetic to worry about. That certainty is the product, and for the right person it is worth the discount.
Reversions are much less common than lifetime mortgages. That is a fact about the market rather than a judgement about the product, and it does mean fewer providers and less choice.
Compare with a lifetime mortgage →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.
Which product suits you, what percentage of value any provider would offer, or what the Council’s reversion standards say. We have not read that document and we are not going to summarise it from memory.
The first is the number that decides it. The second is the document we could not open.
What percentage of market value would I actually receive for the share?
The single most important number and the one that is easy to skim past. Ask for it as a percentage, not just as a sum of money.
Can I see the Equity Release Council's reversion standards?
They are separate from the lifetime mortgage ones and we have not read them. Ask for them by name.
What exactly does my lease say about living there?
You become a tenant in your own home for the share you sold. What that means in practice is in the lease, and a solicitor reads it.
What happens if I want to move?
Different from a lifetime mortgage, where the right to move is a Council standard. Ask specifically.
Have you compared this against a lifetime mortgage on my figures?
An adviser can model both. The comparison is what decides it and it is very hard to do in your head.
Short answers to the things that come up most. None of it is advice, and every figure on this page carries its source.
You sell a share of your home rather than borrowing against it. There is no loan, so there is no interest and nothing compounds. That is the fundamental difference and everything else follows from it.
No, and substantially less than market value. The provider does not get their money back until you die or move into care, and they do not know when that will be. The discount is how they are paid.
Yes, usually rent-free for life under a lease. Your name is no longer on the deeds for the share you sold, which is a real change in how you hold your own home.
A small number of people, and the usual case is somebody who wants certainty about exactly what they are leaving behind. Sell 40% and 60% is yours whatever happens, with no debt growing against it.
No. It is commonly 60 or over, higher than the 55 typical for a lifetime mortgage.
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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