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Author: Carl Shave-Director
Updated on January 30th, 2024

Uses of Equity Release

We can all imagine ways to improve our lives if we had access to a large lump sum of extra cash. By tapping into the value of your home, Equity Release can provide the support for a better way of living, and not only for luxuries or fun pursuits.

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What is Equity Release used for?

Many people are able to use Equity Release funds to make a real difference to their lives, their homes and their family. Below, we run through many of the most popular uses, from the practical to the personal and the essential.

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What can Equity Release be used for?

Can I use Equity Release for home improvements?

If you have been living in a property for many years, even decades, it’s inevitable that time will take its toll. Your home could simply look past its best, or some aspects might even be badly in need of repair, which can be frustrating and demoralising if you only have a small income to work with.

You might want to replace carpets and curtains, get new windows or secondary glazing, or make repairs to the fences or the roof. Perhaps you need a new kitchen and the garden needs re-planting and landscaping. The tax-free cash obtained through Equity Release can allow you to improve the quality and value of your property, and make you proud of your home again.

How can I use Equity Release for care costs?

As the population ages in general, so the need for taking care of us increases. If you need help at home for tasks like cleaning, washing, dressing and cooking, then there are resources available through your local authority. However, budgets are shrinking and the amount your council can contribute will not always meet the full costs of your care needs, so you could be asked to cover the shortfall.

It might be only a small sum per week, but if you have a limited income the numbers soon add up, and you might find it a struggle to make ends meet. Equity Release can provide a way for you to keep a level of comfort and dignity in later life without having to lean on friends or family.

Can I use Equity Release for mobility equipment?

We know that while the mind can stay young forever, in later life the body sometimes lets us down. As we get older, mobility can become an issue and you might need to look at things to help you get around at home, out and about locally, or to travel further afield.

You might be able to get some help from your local authority, but this would be for only the bare essentials. You can use the tax-free funds from Equity Release to adapt entryways, install a stairlift, obtain an adjustable bed and chair or a mobility scooter, or also to adapt your car for easier use. You won’t have to be held back by a lack of mobility again.

How can I pay off my mortgage using Equity Release?

Equity Release is a great way to go from a mortgage that still requires regular monthly payments to a loan that will only be paid back once your property is sold. You might only have a few years left to pay on the mortgage, but this would free up a large portion of your monthly budgets to spend on other things.

Also, Equity Release can help people who took out an interest-only mortgage and found that the investment returns are not enough to cover the whole value of the loan. The plan can be a way to cover the shortfall, keep the bank at bay and ensure their home is safe.

Can I release equity to help with clearing debts?

Some people with expensive credit or loan agreements have been able to pay them off using funds obtained through Equity Release. They might have had no other options at the time, and now find themselves paying off sums due from high rates of interest with no hope of ever being able settle the loan.

Similar to paying off a mortgage, Equity Release can mean replacing the monthly repayments demanded by a creditor with a tax-free lump sum repayable only when your house is sold after you die or move into care, giving you relief from ongoing debts and peace of mind, knowing you can stay in your own home for as long as you need to.

However, it’s worth talking over your situation with an independent financial adviser to make sure you find the most cost-effective option and understand all the risks and benefits.

I want to help my family, can I use Equity Release?

This is one of the most common uses of Equity Release – using a large, tax-free lump sum to pay off the debts or mortgage of a grown-up child or grandchild. It’s possible to provide a struggling family with the freedom to start thinking constructively about their monthly spending (or saving) and improving their lives too.

You could also use Equity Release to help a younger member of the family get onto the first rung of the housing ladder with a large cash gift for a deposit or interest-free loan. Or perhaps they have a great business idea, but just need the funding?

In some ways, this could be seen as giving your family an inheritance when they most need it instead of having to wait years until you pass away. In any case, you should make it clear whether the money you are using to help them is a gift or a loan.

Can I use Equity Release to buy new high-value items?

You might simply wish for better things in life. Instead of being surrounded by outdated technology and old belongings, you could use the funds from Equity Release to pay for a top-of-the-range home entertainment system, a modern car, new bicycles, a caravan or even a boat. You could replace your computer with a high-grade laptop or tablet, get the latest smartphone and update your wardrobe with new suits, dresses, coats, shoes and more.

Taking advantage of the equity in your home could mean you can use faster, smoother, more efficient modern devices, and no longer have to put up with ancient furniture and clunky gadgets.

Can I use Equity Release for a holiday?

Perhaps you find yourself in the fortunate position where your house is in good shape, your body and mind are perfectly sound, your mortgage is paid off and you’re debt-free, your family’s finances are comfortable, your investments are looking after themselves and you already have a modern car, computer and personal possessions.

In this situation, you can use Equity Release to go off and see the world in style. There might be places that you’ve always wanted to go but never had the chance; places that you saw once in a film or magazine, or documentary on TV. You just needed the money to turn a fantasy into a reality.

By freeing up the money in your property, you could see the world from the deck of a cruise liner, tour ancient cities, relax on a secluded beach or soak up the culture and history in Paris, Venice, New York, Tokyo, or anywhere else you like. After all, you only live once.

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