Frequently Asked Questions
Clear, straightforward answers to common questions about equity release, lifetime mortgages, later life lending, costs, eligibility, and how the advice process works. If you cannot find what you are looking for, please get in touch and we will be happy to help.
Equity Release Basics
Equity release is a way for homeowners aged 55 and over to access some of the cash tied up in their property, without having to sell or move home. You receive a tax-free lump sum or drawdown facility, and the loan is repaid when you die or move into long-term care. The most popular form is a lifetime mortgage.
There are two main types: lifetime mortgages and home reversion plans. Lifetime mortgages are by far the most popular (accounting for over 99% of plans). They allow you to borrow against your home while retaining full ownership. Home reversion plans involve selling a share of your property. At RightHomes, we focus on lifetime mortgages and later life lending options.
The funds are yours to use however you wish (with certain exceptions). Common uses include supplementing retirement income, paying off an existing mortgage, home improvements, helping children onto the property ladder, funding care costs, or simply enjoying life more in retirement.
Yes. Money released through equity release is tax-free because you are unlocking capital you already own, not earning income. However, money left in savings may generate taxable interest, and gifts to family members may have inheritance tax implications after 7 years. Your adviser will explain these considerations.
Yes. With a lifetime mortgage, you remain the legal owner of your home. You benefit from any increase in its value. The loan is secured against the property but you are not giving up ownership.
Lifetime Mortgages
A lifetime mortgage is a loan secured against your home. Unlike a conventional mortgage, you are not required to make monthly repayments: the interest rolls up over time and is repaid, along with the original loan, when your home is sold (usually after death or entry into long-term care). Many plans now offer the option to make voluntary repayments.
A drawdown lifetime mortgage lets you release money in smaller amounts over time rather than as a single lump sum. You agree a maximum facility with the lender and only draw funds when you need them, and crucially, you only pay interest on what you have actually taken. This can significantly reduce the total interest you pay.
Yes. Most modern lifetime mortgages allow voluntary repayments, typically up to 10–15% of the original loan amount each year, without early repayment charges. Making repayments reduces the balance and helps preserve more of your estate for your beneficiaries.
With a joint application, when one passes away, the survivor can fully repay the lifetime mortgage without any early repayment charges at all (usually within 3 years of 1st death), to allow the survivor to relocate, remortgage to a cheaper product or repay the balance owed for whatever reason without penalty.
When the last homeowner on the plan passes away or moves permanently into long-term care, the property is sold. The sale proceeds are used to repay the loan and accumulated interest, with any remaining value going to your estate. Executors typically have up to 12 months to arrange repayment.
All lifetime mortgages we recommend comply with Equity Release Council standards, which include a no negative equity guarantee. This means you or your estate will never owe more than the value of your home, even if house prices fall or you live longer than expected.
Later Life & RIO Mortgages
A Retirement Interest-Only (RIO) mortgage is a type of later life mortgage available to homeowners typically aged 55 and over. Unlike a standard lifetime mortgage, you make monthly interest payments so the loan balance stays level. The original loan is repaid when the property is sold. RIO mortgages can be a good option if you want to control interest costs and have sufficient income to cover monthly payments.
The key difference is repayments. With a lifetime mortgage, repayments are optional and interest rolls up (compounds) if you choose not to make any voluntary repayments. With a RIO mortgage, you pay the monthly interest contractually, so the balance never grows. RIO mortgages typically require good credit history and affordability assessments based on your income, whilst lifetime mortgages do not. Your RHER adviser will compare both options and recommend the most suitable product.
Yes. Both lifetime mortgages and RIO mortgages are regulated by the Financial Conduct Authority (FCA). RIO mortgages are regulated in the same way as standard residential mortgages. Your RHER adviser holds the specialist qualifications required to advise on all later life lending products.
How the Advice Process Works
Yes. Financial advice is a legal requirement for all lifetime mortgage products and many later life lending products. Only qualified advisers with specialist equity release qualifications can recommend lifetime mortgages. At RHER, all our advisers hold the necessary qualifications and are members of the Equity Release Council.
Your adviser will take time to understand your personal and financial circumstances: your property, health, income, outgoings, and what you want to use the money for. They will explore all suitable options, including alternatives to a lifetime mortgage. If a product is right for you, they will provide a written recommendation. You are under no obligation to proceed.
From application to receiving funds typically takes 4-8 weeks, depending on the lender, solicitor, and property. Your RHER adviser and case team will keep you informed throughout and work to make the process as smooth as possible.
Yes. Independent legal advice is a requirement of the lifetime mortgage process. Your solicitor's role is to ensure you fully understand the plan before you sign. We can recommend solicitors experienced in lifetime mortgages if you do not have one.
Costs & Fees
There are typically four types of cost: an advice fee (typically £1,495 charged only on completion) and legal fees (typically £995 for your independent legal advice). Most lenders offer free valuations and no arrangement fees, and some offer cashback incentives: your adviser will identify these where applicable.
Our advice fee is only payable if and when your plan completes. If you decide not to proceed at any stage, there is no fee. Initial consultations are free and without obligation.
Many lifetime mortgages do carry early repayment charges (ERCs) if you repay the loan before the plan ends. The structure varies by lender: some have fixed ERCs that reduce over time, others have none after a certain period. There are always exemptions: no ERCs are charged on death or permanent entry into long-term care. Your adviser will explain the ERC structure of any plan before you proceed.
Eligibility
To be eligible for a lifetime mortgage, the youngest homeowner must be at least 55 years old, and your property must be worth at least £70,000 and be your main UK residence. You do not need a good credit history or provable income. You can have an existing mortgage: it must be repaid from the equity you release. Some property types may limit your options.
Yes. Many people use a lifetime mortgage to pay off their existing mortgage. The outstanding balance must be cleared as part of the lifetime mortgage process: you can use some of the funds you release to do this. A lifetime mortgage must be the only charge registered against your property.
Health conditions can actually work in your favour with a lifetime mortgage. Enhanced lifetime mortgages take your health and lifestyle into account: certain conditions may allow you to release a larger amount or access a lower interest rate. Your adviser will review all options, including enhanced plans, based on your circumstances.
Your Family, Benefits & Inheritance
It can. Releasing a lump sum may affect means-tested benefits such as Pension Credit, Savings Credit, Council Tax Reduction, or Universal Credit. However, it may be possible to structure your release, for example using a drawdown facility, to minimise or avoid this impact. Your adviser will carry out a benefits review as part of the advice process.
A lifetime mortgage will reduce the value of your estate. However, there are several ways to protect your family's inheritance: voluntary repayments to reduce the balance over time, drawdown plans (only borrow what you need), and inheritance protection guarantees (ring-fence a percentage of your property's value). Your adviser will model the long-term impact and help you find the right balance.
Safety & Regulation
Yes, provided you use a qualified, regulated adviser and a plan from an Equity Release Council member. The equity release market is regulated by the Financial Conduct Authority (FCA). All plans recommended by RHER meet Equity Release Council standards, which include the no negative equity guarantee, the right to remain in your home for life, and the right to move to a suitable new property.
The Equity Release Council (ERC) is the sector's trade body, representing lenders, advisers, and related professionals. It sets product standards and consumer protections that go beyond FCA requirements. Key protections include the no negative equity guarantee, fixed or capped interest rates on lifetime mortgages, and the right to make penalty-free repayments. RHER advisers are members of the Equity Release Council.
Still have questions?
If you have not found the answer you are looking for, our team is here to help. There is no obligation and no pressure, just clear, honest guidance from qualified equity release specialists.
Free initial consultation. No obligation. Qualified advisers only.
A fee may be charged for mortgage advice. The exact amount will depend on your circumstances, however will usually be; £1,495 for lifetime mortgages, £995 for complex residential and later life mortgages, and £595 for straight forward residential and later life mortgages.
The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.