There are multiple equity release brands that are well-known worldwide. Below we’ll mention them briefly.
A Thorough Look At The Top 10 Equity Release Scheme Providers
Many people are looking for the best equity release scheme providers to help them with their financial needs. After all, releasing equity from your property can be a great way to generate some extra income in retirement. However, to make an informed decision about which provider you should go with, you must take the time to research what is available and compare the different companies out there before making your choice. In this article, we will give you 10 of the top providers and tell you what they have on offer, as well as any negatives associated with them, so that you can find one that suits your needs perfectly!
Age Partnership specializes in equity release schemes for people aged 55-75 and offers the following:
Loan amounts from £25,000 to £500,000. You can borrow up to 25% of your property’s value or 75% if you’re over 65.
They also offer a 15 year fixed repayment period which means that your monthly repayments will stay constant throughout this time. To qualify for Age Partnership, you need to be at least 55 years old with an interest-free mortgage on your home worth at least 20 times more than the loan amount being taken out and have saved some money so that there is enough left after taking into account any other commitments (such as care fees).
They only allow loans up to 25% of the property’s value, meaning this is not suitable for those with larger homes.
And the good news?
They allow loans of higher amounts than most other providers and offer a 15 year fixed repayment period. You can borrow up to 90% of your home equity without having any mortgage on the house itself
The Nationwide Equity Release Service is designed to give you a way to make the most of your home’s value. They offer equity release schemes that allow homeowners over the age of 55 and with at least 25% equity in their property, access up to 75% of its market value – without any interest payments! The scheme can be taken as either a lump sum or as a series of smaller, flexible monthly payments.
One downside is that you can’t use the scheme to buy a new property, only your own home.
Legal & General
The Legal & General equity release scheme is an excellent option for those looking to cash in on their home’s value. With loans starting from £50,000 up to £300,000, you can get your hands on some severe funds that will give you peace of mind.
With lower interest rates than many other providers, the repayments are cheaper overall, but this also means saving money beforehand to pay off any debts before taking out one of these loans.
Their repayment period is 20 years which may not be long enough for people who want a longer time frame before having access to the rest of their capital.
There aren’t any loan limits meaning if your house has more worth than what you’re allowed by law or general equity release schemes, you might find it challenging to get a loan.
The downside with them is that they don’t offer a plan to repay any interest built up with the equity release scheme.
Here’s the truth,
You may need additional funds if you want to renovate your home or have it valued because they only allow one valuation per year, which could be costly, and they cover not all areas.
Aviva offers a range of equity release schemes that can help you to access your capital, with the most popular being lifetime mortgages.
The downside is that they don’t offer any repayment plans for interest built upon loans, and this could be an issue if homeowners are looking to use their funds elsewhere or borrow more money in the future.
Another drawback is the lack of flexibility as not all people qualify for these products, so it’s essential to understand what type of product best suits your needs before proceeding.
But the bottomline is this:
Aviva provides equity release scheme providers with many different options. Still, some negatives, such as no repayments plan for interest accrued on loan and need additional funds from other sources should want to do renovations or have the property valued.
Liverpool Victoria (LV)
Liverpool Victoria (LV) is another provider of equity release schemes and is one of the oldest providers in the country with advantages, including the fact that they offer equity release plans for people who are either retired or approaching retirement age – which can be up to 75 years old.
This company’s schemes come with varying interest rates and repayment terms, so homeowners need to sit down and carefully think about what type of plan suits them best before applying.
However, one downside to this scheme is that they are not a regulated lender, so there’s no protection for homeowners should LV be unable to pay back their debts when needed.
Another issue with this company is that this lenders can’t offer any repayment plans on accrued interest, which could lead to those who want additional funds from future loans or renovations having some difficulties.
Let me explain why,
This means it becomes essential for people looking at these products to make sure they do their research before committing themselves to anything long-term.
Another option for homeowners is a company called Just Retirement.
They offer equity release schemes that can be taken out as an income or lump sum payment, and they have many different plans to suit the needs of their customers.
There are also no fees when taking out a project with this provider, so those looking into it should take advantage of that if possible!
Providers such as these could help people avoid having to sell off assets to cover care costs and other expenses while still staying at home.
These types of providers are also a good option for those who don’t want to worry about the hassle of selling off assets, and they may be able to see an improvement in their quality of life.
The downside of this is that it’s possible these providers won’t be able to provide the same level of support that other types of schemes can.
The provider will also need to be bound by a strict set of regulations, and they may not allow for as much access to their funds to cover certain costs, such as rent on private care homes.
What’s the bottomline?
It is essential for people interested in this type of scheme providers to weigh up the pros and cons carefully before committing – it could make all the difference when trying to decide which one is best suited for them.
More 2 Life
More to Life is a provider that has been around for over 30 years. The company offers various types of equity release schemes.
Still, one of the most popular ones is lifetime mortgages which allow you to borrow against your home’s value and then pay back what needs repaying on an ongoing basis, typically monthly or annually.
Their rates start at just 0% APR so it may be worth investigating their plans if you want something affordable with low-interest rates – though this can depend on how much money you need access to repay your mortgage each month as well.
As well as lifetime mortgages, they also offer equity release schemes such as unlocking your home’s value to provide a one-off lump sum payment, and of course, combinations of these two options are available too.
One of its drawbacks is that they do not offer any advice on how much money you need to repay your mortgage each month – so this can be a disadvantage if you’re looking for the most competitive rates.
All in all,
The company has been around for over 30 years, so have plenty of experience in this industry, but importantly More To Life is approved by The Financial Conduct Authority (FCA), which means that their products comply with strict rules on lending and borrowing – if you’re looking for reassurance then this is certainly something worth checking before signing up!
The company has been around since 1990, so have plenty of experience in this industry, but importantly Age Partnership is approved by the Financial Conduct Authority (FCA), which means their products comply with strict rules when it comes to lending and borrowing – if reassurance is what you’re after then this might be the ideal option!
Providing a range of equity release products with fixed interest rates and competitive monthly payments, this provider is for people aged 50+, without children.
There are no upfront fees or charges from them, so the amount you borrow can be free of charge.
A couple of other things to keep in mind with this provider is that they don’t offer a loan guarantee as some others do, and also, there’s no transfer option.
Hodge Lifetime is an equity release provider for pensioners age 60+ who don’t want to take their money out of the market.
They offer a range of products with variable rates and competitive monthly payments, which might suit you if you’re looking for flexibility.
However, they are not available in Northern Ireland or Scotland.
There’s no upfront fee to pay from them, so the amount you borrow can be free of charge.
Still, there is a minor exit penalty should you need to transfer your home after borrowing – it’ll cost £100 plus legal fees per year left on your mortgage contract at that point (until all outstanding debt has been repaid).
The maximum loan limit will also vary depending on where you live – if, in England, this could be up to 90% of the property’s value (subject to affordability). Still, if in Scotland, then it will be up to 75% and Northern Ireland just 60%.
There is a minimum loan duration in terms of disadvantages depending on where you want your money released – for example, anywhere from 20 years or until age 95.
They also don’t offer any equity release plan without an LTV mortgage, meaning that you’ll need at least 40% equity to qualify, so this might not be appropriate for people with poor credit who are looking for cheap mortgages.
What does this mean?
Some people face higher rates than others because they have fewer funds available elsewhere too.
Stone Haven is one of the most popular equity release providers in Scotland.
They’re an independent company that means they don’t rely on any other lenders for their business – this can be a good thing because it means that if you want to switch from another provider, you’ll only have to do so with Stonehaven.
Still, as well, there’s no stability guarantee either.
You can borrow up to 75% or 90% depending on where your property is located and whether it has been refurbished since 1979 (in England) or 1980 (elsewhere). It offers guaranteed lifetime mortgages, too, which are risk-free.
The minimum age for taking out a plan is 66 years old, and there’s no maximum loan duration either, meaning that you could stay in your home for the rest of your life.
The fees to apply and borrow are typically around £290, which is pretty reasonable given how much money you can potentially save with Stonehaven.
One downside is their rates. They are slightly higher than some providers, making them less attractive for those who want to borrow just short-term or have lower needs.
But here’s the kicker:
There isn’t much more to say about Stonehaven given how well they’ve done so far with helping people achieve financial security – especially since many of these schemes come with 100% repayment guarantees from the Government if things go wrong.
2 Types Of Equity Release Plans Or Schemes In The UK
1. Lifetime Mortgage
This type lets you release equity from your home if it’s your primary residence. However, you’ll remain the owner. You’ll have the option to ring-fence part of your property for your family to inherit. You can also make repayments or let the interest roll-up1.
The loan amount and any accrued interest will be paid back when you pass away or need long-term medical care. You can choose from 221 different types of lifetime mortgage plans, so you’ll certainly be able to find one that suits you.
2. Home Reversion
You sell a portion of your property or your whole property. You sell it to a home reversion provider, and they’ll pay you a lump sum for it, but they can also pay you in the form of regular payments. It’s your choice. You have to be at least 60 years old to apply for this.
Now, listen to this:
You can live in that property until you pass away without paying rent. The only catch is that you have to keep the property in good order and keep it insured. There’s also the option to ring-fence a section of the property to ensure a certain inheritance for your beneficiaries2.
Now, you might be asking yourself this:
Top 8 Lifetime Mortgage Providers
As you might know, lifetime mortgages are the most sought after equity release plans. Big brands that offer insurance and pension plans also provide equity release schemes. Let’s look into these equity release companies specifically. Here’s a list of our top favourites in the UK:
In the UK, Aviva is a household name. They’re known mainly for their pension plans and insurance products. To add to that, they’re one of the oldest providers. If you’re considering them, it’s good to know that their equity release products are award-winning and that over 200 000 people would agree with their top spot. Since 1998, Aviva has helped people release a total of £7 billion.
Aviva’s primary services include:
- Inheritance guarantee services
- Voluntary partial repayments
- Enhanced borrowing if you have certain medical conditions
- Downsizing protection services
- Relaxed lending services
Aviva has a lot to offer, and they’re an excellent choice.
2. Hodge Lifetime
In 1965, Hodge Lifetime launched its first equity release plan, making them the longest established provider in the UK. Julian Hodge Bank Limited is the product provider. As one of the oldest providers, they’ve built up an excellent equity release selection. They’ve created a superb retirement mortgage range to go with their traditional lifetime mortgage plans.
Hodge Lifetime provides an interest-only mortgage plan requiring monthly interest payments. The rest of the loan will be paid back when you pass away or need long term medical care.
You can apply for this plan from the age of 55. You can borrow up to 70% of your property value, which is excellent if you need the money.
3. Just Retirement
Extremely popular in the post-retirement marketplace, they’re excellent in giving retirement income in the form of annuities. They’ve also started lending cash through equity release plans or schemes.
Just Retirement also has its equity release model, which has proved to be one of its strengths. Not only do they lend money, but they also fund other company’s equity release plans. Their equity release plans include a wide range of traditional lifetime mortgages; drawdown lifetime mortgages, interest-only lifetime mortgages, lump-sum equity plans, and enhanced equity release plans.
Just Retirement’s experience with medical underwriting has allowed very ill people to get an increase in their maximum equity release lump sum.
LV, or Liverpool Victoria, is a mutual society and was created in 1843. They work primarily for working-class people. They offer a range of equity release plans such as drawdown lifetime mortgages and lump-sum schemes. You can get equity release on your primary residence, your secondary residence, and your holiday home.
They’re offering structured lifetime mortgage schemes, and they have outstanding guarantees that most other providers don’t provide. They’re suitable for secure repayments or if you want to access future drawdown money.
5. Legal & General
They’re also a household name and joined the lifetime mortgage field in 2015. They have two options for lifetime mortgages: L&G Income Lifetime Mortgage and L&G Flexible Lifetime Mortgages.
Let’s take a look.
L&G Flexible Lifetime Mortgages
You get colour-coded to indicate the amount of money you can borrow according to your property’s value (LTV). For example, “Flexible Pink.” Furthermore, the amount of interest you’ll pay will depend on the LTV.
All these are drawdown plans that L&G offer. With these, you’ll be able to borrow a minimum amount of £10,000. The “Flexible” mortgages range allows voluntary repayments which give you up to 10% of what you borrowed annually, but you won’t be penalised.
L&G Income Lifetime Mortgage
These are also colour-coded. The same rule applies where you’ll pay more interest when the LTV is high. These plans give you a fixed monthly income for 10-25 years. This income can start from £200.
Legal & General offers inheritance protection on their plans, which is great for your heirs and your own peace of mind.
Started in 2008, More2Life has become a favourite equity release provider. They’re a leading expert in lifetime mortgages. However, you can only get a plan through unique brokers, for example, Equity Release Supermarket.
Now, they have four options:
More2Life Flexi Choice Plans
These are funded by a life insurer that’s leading in the UK. There are different types of choice plan. They also have differing loan sizes as well as the interest rate and min-max amounts. It’s very flexible and customisable to meet your specific needs.
More2Life Tailored Choice Plans
If you’re suffering from qualifying medical conditions, this one’s for you cause you’ll be able to borrow more.
More2Life Maximum Choice Plans
If you’re looking to get the most money possible, this is the plan for you. You can take the money out lump-sumly or as a drawdown.
More2Life Capital Choice Plans
There are a few versions of this option. For example, taking a small loan will equal less interest. You’re allowed to make repayments of 10% annually, and you don’t have to pay early repayment charges either6.
Any of these plans are very flexible, so you’ll be able to get the right one for your specific financial needs.
Formed in 2015 when Engage Mutual and Family Investments merged, this provider is one of the largest in the UK. They offer variable and fixed lifetime mortgages.
OneFamily Variable Lifetime Mortgages
You’ll be offered a variable interest rate on your plan according to the CPI, or the Consumer Price Index. It also comes with a cap and collar to safeguard you against future increased rates. They meet the guideline of the Equity Release Council.
OneFamily Fixed Lifetime Mortgages
Fixed-term and lifetime interest rates are also an option. You’ll get flexible features and choices which you can discuss with them. You can pick an interest-only payment or a voluntary payment, and even an interest roll-up option exists where no repayments are needed to be made!
#08. Pure Retirement
Last but not least, a company that has been around since 2014. They’re known as a specialist lifetime mortgage company provider. They offer two ranges of lifetime mortgages: Pure Max Drawdown and Pure Sovereign.
Pure Max Drawdown
This range is for people who want to borrow as much money as possible. It gives you higher LTV’s and a drawdown capability. This means that you can borrow money now and later in your life from your reserve amount. Within this range are a few options for you to choose from.
You can mix and match fees like legal, arrangement and valuation fees for a fee-free process.
This range works similarly to the Max Drawdown options. However, the only difference is the interest rate. With the Pure Sovereign range, the interest rate is lower since the LTV is less.
As we’ve covered the lifetime mortgage providers, we should also cover the home reversion providers. They’re listed below.
Top 16 Home Reversion & Retirement Mortgage Providers
Even though most people opt for lifetime mortgages, you can also decide if you’d like to have a home reversion mortgage or retirement mortgage instead.
Here we’ve listed our best Home Reversion providers:
This company is one of the more prominent companies within the Retirement Bridge Group that manages more than 4500 reversion plans in the UK. Bridgewater was created in 1912, and they’re regulated by the FCA (or the Financial Conduct Authority) and the ERC (Equity Release Council).
Bridgewater offers many home reversion options. Most of these offers are focussed around tenants paying rent to the homeowner. The first option is no rent, the second option is fixed rent, and lastly, there’s escalating rent.
If more rent gets paid, then more money will be released lump-sumly by Bridgewater. And if you want an inheritance guarantee, home reversion can help you with that as well.
Let’s take a look at Crown, founded in 2001. This provider uses private investors for funding their plans. All their plans are according to the ERC’s code of conduct. This ensures all members peace of mind – tenants can’t be evicted according to this code of conduct.
Listen to this:
Crown is one of the few providers that offer great flexibility because investors fund them. Crown accepts property that most lenders won’t – property that falls outside the standard property criteria.
Best of all…
They also will sell your property up to 100% of its value while you can pay monthly, according to the plan you choose.
Here we’ve listed our best Retirement Mortgage providers:
3. Bank of Ireland
This is a provider associated with Post Office Money®. They offer a range of mortgage options specially created for borrowing money even into your retirement.
4. Beverly Building Society
Beverley Building Society is a provider that’s Yorkshire-based and regional society. They offer a mortgage that’s an interest-only retirement mortgage, which is excellent for your finances! I mean, no one wants to pay too much interest.
5. Buckinghamshire Building Society
Buckinghamshire Building Society is a small, village-based society. They offer options of fixed as well as discounted rate retirement mortgages.
6. Family Building Society
Family Building Society is a provider that borrows money to retired people. They have a variety of retirement mortgages so that your individual needs are met.
7. Hanley Economic Building Society
Hanley Building Society was established in 1854 in Stoke on Trent. They are willing to borrow money to people up to the age of 80. This allows you the freedom to borrow money into your retirement if you choose them as your provider.
8. Hinckley and Rugby Building Society
Hinkley and Rugby Building Society offer fixed as well as discounted retirement mortgages. You can employ them once you turn 55 years of age with no maximum age. They’ll lend you up to 60% of the value of your property, also known as the LTV. Best of all, they don’t require early repayment charges.
9. Hodge Lifetime
As mentioned above, Hodge Lifetime was launched in 1965 when they introduced their first equity release plan. They’re the longest-existing provider in the UK. Their retirement mortgage is a hybrid of residential retirement and lifetime mortgage plans.
Listen to this!
It’s interest-only, and you’ll have to repay the interest on a month-to-month basis until the owner of the property dies or goes into long term medical care.
10. Ipswich Building Society
They’re situated in Suffolk, and they offer options like discounted and fixed-rate retirement mortgages. You have to be 55 years or older to take this mortgage. The minimum that you can borrow is £25,000 and £500,000 maximum.
11. Leeds Building Society
Leeds Building Society has a residential mortgage range for people up until the age of 80. therefore they’re all so perfect as retirement mortgages, so it isn’t for younger people only.
12. Mansfield Building Society
Mansfield Building Society gives you RIO mortgages options with fixed or discounted rates. They have different lengths you can choose from, terms of 2 to 3 years. They aim to be a trustworthy and secure mutual organisation. They’ll use 100% of your pension salary, and they assess each individual’s situation to determine your plan.
13. Marsden Building Society
Another society created in 1860 and offered fixed and discounted rate retirement mortgages with a three or 5-year fixed-rate RIO for those over the age of 55 who own a home. They’ll borrow you money up to the value of 50% of your property, with the minimum value being £150,000.
14. Newsbury Building Society
Newbury Building Society a smaller mutual society which offers a single discounted rate 5-year retirement interest-only (RIO) mortgage. They’ll pay about £700 of your property valuation fees, so you don’t have to, and they also don’t charge you legal fees either.
The RIO is discounted, and overpayments are allowed. However, you’ll have three years to do early repayment charges. Within this ERC period, you can overpay up to 20% of your initial loan.
15. Penrith Building Society
Penrith Building Society offers an entire residential mortgage range. It’s suitable as a retirement mortgage as there’s no age limit attached to it. You’ll also be borrowed up to 50% of your property value if you’re 55 years or older.
16. Scottish Building Society
Established in 1848, Scottish Building Society is the only society situated in Scotland. They allow homeowners to borrow money up to the age of 85. You can borrow up to 50% of your property value, minimum being £30,000, maximum being £300,000. Your income determines the maximum you can borrow, and that could be your pension income as well.
17. Swansea Building Society
Swansea Building Society was born in 1923. They’re offering one retirement mortgage plan that’s solely for properties in Wales. They’ll lend you up to 60% LTV (your property’s value). You’ll need to receive an income of £18,000 minimum, you have to be retired, and 50% of your income must come from your retirement income specifically. You’ll be lent money up until the age of 85.
18. Tipton and Coseley Building Society
‘The Tipton’, a small building society, is situated in the West Midlands. With them, you’ll be able to get a fixed or discounted rate retirement mortgage of many varieties. They have options like a three and 5-year terms as well as a whole term discounted mortgage with their “later life lending range.”
High Street Banks & Lifetime Mortgages
The ‘big 6’ high street banks are Halifax, Barclays, Lloyds, HSBC, Santander and Royal Bank of Scotland (RBS). They don’t offer lifetime mortgages at the moment. They also don’t provide other equity release plans. Therefore, you’ll need one of the companies or societies listed above to provide you with a mortgage.
In recent years, Nationwide has joined the lifetime mortgage market too. However, they don’t have their plans. They use Pure Retirement instead to do those services on their behalf.
What's the Catch With Equity Release Companies?
You need to keep in mind that the money you borrow you’ll have to repay that money at the end of your life or when you go into permanent long term care. However, each company has different parameters and policies. You’ll need to research every company carefully before you take out a plan with them. Some companies have extra charges they don’t initially tell you about, and other companies don’t charge all the fees others do: admin fees, for example.
What Are Pitfalls of Equity Release Companies?
You have to ensure that the company is a member of the ERC and follow the guidelines of the FCA preferably. Make sure about the company’s policies and terms and conditions so that it doesn’t get you down in the future. Look into things like the no negative guarantee etc. and make sure you’re happy with every part of the company before choosing one.
How Much Interest Do Different Companies Ask You Pay Back on Equity Release?
When it comes to lifetime mortgage equity release used to be much higher, but today it’s at a low 2.25%! It’s shallow compared to past rates of over 5%. However, every company or provider has differing interest rates and rates in general. Do your mathematics before you choose a provider and plan.
Which Is the Best Company for Equity Release?
More2Life, Aviva and Legal & General are just a few that are great companies for equity release. Read more about them in the article above.
When you’re looking to release equity from your home, it’s better to shop around. After looking at all these beautiful options, you’ll end up with the perfect provider to suit your needs exactly. Every provider has its quirks and features, so you must look at all of them in detail to determine which one’s for you.
You can choose from lifetime mortgages or home reversion mortgages. Your choices are unique, so not to worry! Your money borrowing days are going to be much easier from now on!