Mythbuster: "I'll have monthly repayments"

Are there monthly repayments?

Monthly repayments can be a huge burden, but with equity release there is no need to worry.

Many of our customer choose to use the tax-free cash they release from their home to pay off existing debt and reduce their household's monthly expenditure, with no need to factor paying it back into their budgeting. Although you should always think carefully before securing a loan against your home to repay existing debt.

With equity release, you don’t have to make monthly repayments. That’s because a lifetime mortgage (a type of equity release) is a loan secured against your home and the loan plus compound interest, is typically paid back when your plan comes to an end. That’s usually when you, or the last remaining applicant, either passes away or enters long-term care.

There are also no monthly repayments with a home reversion plan, another type of equity release where you sell all or part of your property to a reversion company for lower than market value to receive a cash lump sum. Therefore, it’s not a loan, as you’re selling all or a stake in your home. By taking out equity release, you can rebalance your household budget much more effectively than with some other lending alternatives.

However, our specialist equity release advisers will always discuss other alternatives to equity release with you to make sure you’re making the right choice for you.
 

Back to Mythbusters

Things to consider

• All our equity release advice relates to Key lifetime mortgages only - a loan secured against your home
• The loan, plus compound interest, is typically repaid through the sale of the property when the last remaining applicant passes away or moves into long-term care
• Our fixed advice fee of £1,299 is only payable on completion