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What can I use equity release for?
The money you unlock through equity release is tax-free. You can use it in several ways, such as:
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Repay your existing mortgage
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Support your loved ones
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Boost your retirement finances
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Make home improvements
Ready to get started?
See how much you could release tax-free with Key's award-winning equity release service
Calculate now
ⓘ Be financially aware. Equity release comes with drawbacks which are important to think about.
ⓘ Be financially aware. Equity release comes with drawbacks which are important to think about.
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Transcript
What are the benefits and drawbacks of equity release?
Like any financial product, equity release has potential benefits and drawbacks to weigh up.
Benefits
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Tax-free cash: You can unlock cash from your home, tax-free, to help meer your needs in later life
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Stay in your home: You'll retain full ownership of your home and can stay in it for as long as you wish
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Reduced or no monthly repayments: You can make reduced or no monthly repayments with a lifetime mortgage. This applies to a payment-term lifetime mortgage after the oldest applicant turns 66, and overpayments can be made at any time, subject to criteria
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No negative equity guarantee: You'll never owe more than your home's worth or pass on any equity release related debt to your family, provided terms and conditions are met
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A payment-term lifetime mortgage: Could allow you to unlock more of your home's value at a lower interest rate than a comparable lifetime mortgage
Drawbacks
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The interest can build up quickly: Lifetime mortgages and payment-term lifetime mortgages are loans secured against your home and are subject to compound interest, meaning the amount you owe can grow quickly
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Reduced value of estate: Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits
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Long term financial product: These are long-term financial products and are not designed to be repaid early. If you do, early repayment charges may apply
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Reduced or no property equity: Equity release may leave you with limited or no property equity remaining and will reduce your financial options in the future
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Mandatory payments: There's a period of mandatory payments with a payment-term lifetime mortgage, and your home may be repossessed if you don't keep up with these payments
We only recommend equity release if it's right for you
You have to receive qualified advice before taking out equity release, so you can be sure it's the right decision for you
All our equity release advice relates to Key lifetime mortgages and payment-term lifetime mortgages only - loans secured against your home.
Our fixed advice fee of £1,299 is only payable on completion. Equity release will reduce your estate's value and may affect your entitlement to means-tested benefits.
A lifetime mortgage or payment-term lifetime mortgage may result in limited or no property equity remaining and will reduce your financial options in the future.
You can only release equity through a qualified equity release adviser, who'll make sure:
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You only borrow what you need
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You understand how the product works
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It's right for you - if it's not they'll tell you
With Key's range of lifetime mortgages, you could access the funds you need now and still own your home. There are typically no monthly repayments to make, unless you choose to do so. The loan, plus compound interest, is usually repaid through the sale of your property. This is generally when the last remaining applicant passes away or moves into long-term care.
You have two options when it comes to releasing your funds with a Key lifetime mortgage: a lump sum or a drawdown. You can find out more on lump sum vs drawdown here.
In 2023, Key customers could release an average of £78,334 from their homes (Key Market Monitor, 2023).
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You'll need to release at least £10,000
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The older you or your partner are, the more money you may be able to release (based on the age of the youngest applicant)
The amount of equity you could release is based on your age, health, lifestyle and property's value. Our free calculator shows how much you could release.
Explore our tools and guides
Is equity release safe?
All our plans meet the Equity Release Council standards, so you'll:
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Never owe more than your home's value
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Have the right to move home, subject to criteria
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Have the right to stay in your home for life
Watch our video to find out about the safeguards and protections Key lifetime mortgages come with.
Useful links:
Yes, equity release is regulated.
Our equity release advisers also have specialist qualifications, putting you in safe hands.
What interest rates are available for equity release?
Lifetime mortgage interest rates vary depending on your plan and circumstances. They're fixed for the life of the equity release plan.
Representative example
Rates correct from 15th December 2024. Based on customer data from the last 60 days, apart from Key's lowest rate. Interest rate received and plan features are subject to eligibility. Ask for a personal illustration.
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AER stands for Annual Equivalent Rate. It shows what the interest rate would be if the interest compounded each year.
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APR stands for Annual Percentage Rate. It's the cost you pay each year to borrow money, including fees, expressed as a percentage.
Our equity release UK calculator will give you an idea of how much you could release. Your equity release adviser can give more information on interest rates.
Calculate nowYou should consider early repayment charges
A lifetime mortgage is a lifetime commitment. Repaying early may mean having to pay early repayment charges. Our early repayment charges are fixed so that you know exactly what to expect.
You have the option to repay early
Our flexible features do give you the option to make voluntary, ad-hoc payments. This is between 10-12% of the initial amount that you borrowed each year. This reduces the size of the loan on which you're charged interest. Making repayments means you'll repay less overall.
Speak to your equity release adviser
Your adviser can explain how early repayments work. They can help you to make informed decisions on what's right for you at the time.
Learn more about equity release costs
Am I eligible for equity release?
To take out an equity release plan with Key, you must be a UK homeowner:
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Aged 55+ (including all joint applicants)
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With a property worth £70,000+
Find out if you could release more funds with your current plan. You could switch to a different one which may suit your needs better. Your equity release adviser will check if early repayment charges will apply.
If you're looking to switch to us or want to discuss your existing equity release plan, we're here to help.
Existing Key customer
Call us on 0808 252 9170 to talk about your plan
Switch to Key
Call us on 0808 252 9170 to switch to Key
Lines open Mon-Thursday 9am-8pm, Friday 9am-5pm, and Saturday 9am-1pm.
Your other options with Key
If another product is more suitable, we'll refer you to a different adviser within Key Group to help. If you go ahead, you'll only be charged the same £1,299 advice fee you'd pay with us, even if their fee is usually higher. Key offers alternatives to equity release such as a retirement interest-only mortgage or retirement repayment mortgage.
Other options to think about
It's important to know your other options before going ahead with equity release. These include: downsizing, unsecured lending, using existing assets, or support from friends or family.
Not eligible for equity release?
If you're not eligible now, try our later life mortgage finder. We could still help you take control of your later life finances.
Free equity release guide
There are different types of equity release which help thousands of UK homeowners take control of their retirement finances.
For more information on your retirement options, read our free, comprehensive guide today.
Why choose Key Equity Release?
Key is a specialist, award-winning equity release provider for the over 55s. We could help turn your property wealth into a way to fund your retirement. We research all later life mortgage options and provide trusted, expert advice that's personal to you.
Customer stories
Don't just take our word for it - see what our customers are saying...
Michael & Carol, 64 & 63 - approaching retirement
"All the worries and the stresses have gone now. We can just look forward to having a nice relaxing retirement…We’re planning to go away on a couple of cruises."
How to release equity from your home
We're here to help you
Our friendly equity release team is available: Mon-Thurs 9am-8pm, Fri 9am-5pm, Sat 9am-1pm, Sun closed.
Call free on 0808 252 9170 or book a call and we'll get in touch with you.
Page last updated: Monday 16 December 2024