UK Equity Release Calculator

5 Ways That Equity Release Can Change Your Life

Are you approaching your sunset years and looking to add some money to your bank account? Do you wish you could make the most of your home without giving it up? Lucky for you, equity release arrangements allow homeowners to make money from their home without changing their addresses.

If you want to find out how much money you stand to borrow against your current home, use this equity release calculator from SovereignBoss to do the math.

But first, what’s equity release? As the name suggests, equity release involves giving up or releasing a portion, or all of a property’s capital value. In simpler terms, you’ll be giving part or all of your home to a third party in exchange for a regular income or cash lump sum. The best part of this is that you’ll still get to live in your home for as long as your equity release plan allows. For most seniors, this is usually for as long as they live or until they move into a care facility.

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If you’re seriously considering mortgaging your home for income, you’re probably looking to understand the benefits of this course of action. After all, your home is a valuable possession, and you should never give it up unless the deal is sweet enough. Let’s consider some of the benefits of equity release:

Financial Freedom

Beyond a certain age, working overtime or taking on additional jobs to boost your paycheck becomes impractical. Your fifties, sixties and beyond are a time to reflect on your journey through life while kicking back to enjoy the company of your loved ones. You cannot do this if you’re always worried about money. Equity release arrangements eliminate financial difficulties by giving you the financial freedom to enjoy the trappings of life. Whether you’re looking to go for that well-deserved vacation or help your child buy their first home, equity release makes it all possible.

Rent-Free Living

Here’s the thing—equity release involves giving up your house to someone else in exchange for a decent amount of money. Under normal sale transaction circumstances, this would demand that you move out of your home. With equity release, this isn’t a requirement. Instead, you get paid to keep living in your house, rent-free! It doesn’t get better than that.

You get a lump sum or several spread-out payments to live your best life without worrying about keeping a roof over your head.

Tax-Free Income

Everybody likes tax-free money because what you see is what you get. With equity release, you don’t need to worry about agreeing on an amount only to receive a taxed portion of the same. Instead, what you sign on is what you’ll receive in your bank account.

No-Negative Equity Guarantee

Many equity release schemes offer a no-negative equity guarantee. This guarantee assures that any debts you accrue against your property will never exceed your property’s value, the future state of the housing market notwithstanding. In other words, you’ll always be sure of the fact that your home will be enough to cover all your financial obligations when you die.

This way, you can fully enjoy the financial benefits of your property without the nagging concern that your loved ones or children will be left to suffer the consequences of your credit.

Lower Inheritance Tax

By giving up some value of your home, you can reduce the Inheritance Tax on your property. Inheritance Tax is the amount of tax that an heir is expected to pay the taxman after inheriting property of a specific value. In the UK, inheritance properties whose value exceeds £325,000 are subject to taxation.

If you can keep the value of your property below this, then you may spare your heirs the agony of paying taxes after your death. In the same breath, equity release allows you to obtain money in the present moment which you can gift to your loved ones in place of property.

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There you have it. Whether you’re looking to boost your financial freedom and afford everything you were unable to in your earlier years, or plan your estate, equity release plans are just what you need. A lot of seniors have benefitted from these excellent benefits discussed herein, and just like them, you too can change your life with equity release.