Freeing up funds in retirement: Equity Release vs Home for Life Plan

- Tue 03 Oct 2023

Are you over 60 and thinking about moving? The increased cost of living has prompted homeowners to re-evaluate their financial situation, seeking ways to adapt to the evolving needs and secure their financial future.

Maybe you're aiming to clear some financial hurdles, such as funding a holiday getaway, sprucing up your cozy winter home or garden, gifting to your loved ones, or even swapping out your trusty old sled for a new one. If you're on a fixed income and seeking ways to unlock extra funds, the idea of making a seasonal move to free up funds for your retirement might have crossed your mind.

Exploring your options is crucial, especially as we are going into the later months of the year, and for many individuals aged 60 and over, it often boils down to just two choices: Equity Release or a Home for Life Plan

With each option comes a set of pros and cons, and you'll be doing some research to get a complete picture and decide independently what's best for you in the long run. To shed some light on these options, here's a breakdown of the key differences between equity release and a Home for Life Plan.

Equity Release:

Firstly, do you own a property? Equity release offers a way to tap into the equity of a property you already own, like digging up a buried treasure. Typically, it involves a long-term loan that's repaid using the home once you pass away or go into long-term care.

Are you wanting to move home or stay in the property going into these winter months? If your current dwelling is your long-term plan, and you're not ready to venture into a different home, equity release might be your preferred solution. A Home for Life Plan can only be applied to a property you do not own (so you must be moving).

If you fancy expanding your current home or making some upgrades to meet your long-term needs, equity release could be your ticket to freeing up funds to make the changes you want.

There are two different types of equity release, a lifetime mortgage and home reversion.

Lifetime Mortgage –

- The loan is typically secured on your property, and you receive the money as a tax-free lump sum.

- Interest usually accumulates over time.

- The loan is typically repaid when your property is sold after you pass away.

Home Reversion:

- Typically, you sell all or part of the property at less than the market value in exchange for a tax-free lump sum, regular income, or both.

- You continue to stay in the property as a tenant until the reversion plan concludes.

If you own a property and are considering your options, book a free, no-obligation valuation with our expert team today, and discover how much your property could sell for..


Home for Life Plan:

With the changing seasons, the Homewise "Home for Life Plan" is your ticket to securing the perfect winter retreat in your dream location while also freeing up funds for your winter wonder years.

In simple terms, a Home for Life Plan is your way to secure your next home for thousands less than the market value, complete with a Lifetime Lease. This means your winter budget can go a long way, or you can save more to make your winters even merrier!

The Home for Life Plan isn't the same as equity release. It's not a mortgage or loan (it's not a financial product at all), so there's no interest to worry about or debts to repay at any point.

While you won't own the property with a Home for Life Plan, you'll be a Lifetime Lease Owner, and this lease is registered at the Land Registry. This ensures you're legally protected, and entitled to live in your home, rent-free and mortgage-free, for your lifetime.

Home for Life Plan

Must be moving home

No accrued interest to pay

No future loan to repay

Lifetime Lease Owner

Equity Release

Is secured on your current property

Interest accumulates over time

Will be loan repayments to make at the end

Property Owner

Now, here's a seasonal twist you might not have expected: Contrary to popular belief, a Home for Life Plan can also be part of your winter inheritance planning. Every Home for Life Plan is bespoke, and you have the option to safeguard anything from 0% to 50% of the future value of your chosen property, which can be used to secure a guaranteed inheritance for your estate.

So, you can enjoy a cozy winter retirement in a home you adore and leave behind inheritance for your loved ones. You can even unlock some funds to give an early inheritance now and safeguard for future inheritance if you wish.

Whether you're dreaming of downsizing to a snug cottage or looking at upsizing, craving a larger winter garden, looking to relocate closer to loved ones, or simply wishing to shed financial worries, a Home for Life Plan might be your perfect winter solution.

You won't have to break the bank to purchase a property. Instead, you can create savings to enjoy financial freedom during the changing seasons and still reside in a home that warms your heart. Explore the cost of your dream winter retreat with a Home for Life Plan today.

Find your perfect winter escape and try our quick calculator to estimate your savings, or visit our Over 60s page and input your desired winter spending to instantly see the property price that could make your winter dreams come true!

Ready to embark on your winter journey? Contact our expert team and discover how we could assist you in finding the perfect property for your future.