EQUITY RELEASE

What is equity release?

Equity release is a way of unlocking some of the value of your home and turning it into tax-free cash.

The most common way to release equity for those 55 and over is with a lifetime mortgage. You can also release equity through a home reversion plan – but this isn’t something Saga Equity Release offer.

How do lifetime mortgages work?

They’re similar to normal mortgages except you don’t have to pay back any money whilst you’re still living in the home. ( Although some products allow you to make monthly or ad hoc interest payments.) A lifetime mortgage is a loan secured against your home.

You still own your home. The money you borrow (and interest) is usually paid back from the sale of your property after you die, or if you move permanently into long-term care. If you have a joint lifetime mortgage with someone else it’ll stay in place until the last borrower dies or moves into permanent long-term care.

Most lifetime mortgages have a ‘no negative equity’ guarantee. That means you, or your estate, will never have to pay back more than the amount the property sells for – even if it’s less than the mortgage amount owed.

Equity release can be a useful way to access funds for later-life expenses, such as home improvements or purchasing a new car. But because of the way it works, it will reduce the value of the estate you leave your loved ones. And it could affect any means-tested state benefits you get.

So you should think carefully about whether it’s the right thing for you.

Step-by-step - how to apply for a Saga Lifetime Mortgage, provided by Just.

Step 1: Find out if equity release is right for you

The Saga Equity Release team will establish your eligibility and, if you'd like to go-ahead, can set up a meeting with an adviser. The adviser will discuss your needs and your circumstances, and pull together a recommendation report.

They'll also undertake a state benefits check to make sure that you're getting everything you're entitled to. If there are any alternatives to equity release that could help you get the funds you need another way, they'll discuss these with you.

Saga Equity Release is a no-obligation, no-pressure service dedicated to finding out if equity release is right for you. You’ll need to pay an advice fee of £799 if you decide to proceed and take out a Saga Lifetime Mortgage.

Step 2: Apply for your product

The Saga Lifetime Mortgage has flexible options and features. At this step, your adviser will explain how it can be tailored to your circumstances.

If you're happy with the recommendation and want to proceed, next it'll be time to apply for your lifetime mortgage.

Step 3: Receive your tax-free money

Once Just have accepted your mortgage application, they'll aim to put the money into your solicitor's account within 40 working days.

If this doesn’t happen, and you've met the terms and conditions, Saga Equity Release will give you £100 under the Saga Service Promise (this only applies if you’re re-mortgaging your existing property, not if you’re buying a new one) – find out more in the terms and conditions.

Step 4: Spend your tax-free cash

… on almost whatever you want. But if something changes and you don’t need the money, the Saga Lifetime Mortgage comes with a Money Back Guarantee. That means you can pay it back within six months of your completion with no penalties – so no interest or early repayment charges.

This guarantee only applies if your initial equity release payment is less than £150,000. There are other conditions. Find out more in the terms and conditions.