Which Banks do Equity Release?
If you live in the UK and are hoping to release equity from your property, then there are a number of different lenders and equity release plans from.
So, if you are wondering ‘Which banks do equity release?’ you should continue reading.
It is important to understand that lots of banks work with lenders, as opposed to offering equity release plans directly.
Whilst there are a number of banks that do offer equity release, the chances are that they will be working with another company to offer you equity release.
Which banks do equity release – What is equity release?
Equity release is a great option for anyone aged over 55 years old, living in the UK who needs access to more money but does not want to move out of their home.
There are a number of very good reasons why people aged over 55 years old do not want to move home.
For example, some people do not want to move home because they do not want to move away from loved ones, or because they have too many memories in their home.
Others do not want to move home because they simply could not cope with the upheaval and stress of selling and buying another home.
Whilst this is the case for many, many pensioners are finding themselves in need of more money. This is why equity release is a great solution for many people.
When people opt for equity release, they are able to gain access to the money that has built up in their home, whilst being able to remain living in their home for as long as they are alive.
Equity is the sum of money that has built up in your home over the years. This includes the increase in value your property has benefited from over the years compared to what you bought it for, as well as your initial deposit and your monthly mortgage repayments.
However, it is important to understand that this does not include the interest you have been paying on your current mortgage each month.
Lots of people opt for equity release because you do not have to repay a penny until you pass away, or move into a care home for health reasons. The loan is repaid from the sale of your property after you pass away.
Age UK highlights that there are two types of equity release loans, including lifetime mortgages and home reversion plans. You will need to discuss what plan you should opt for with an equity release advisor [1].
You will be charged interest on your loan, which will easily compound. For this reason, lots of people choose to pay off the interest on their loan whilst they live, so that the overall loan amount is reduced.
This means that there might be some money left over from the sale of your house after the loan is paid, which could go to your loved ones as an inheritance.
Please note, it is important to understand that all equity release schemes across the UK will benefit from inheritance protection and a no negative equity guarantee.
This means that if your house were to decrease in value by the time your loved ones come to sell, and the house’s value no longer covers the loan amount, your loved ones will never be liable to pay the difference. Your lender will always remain liable for the shortfall.
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Which banks do equity release?
Lots of people who consider releasing equity from their home wonder which banks do equity release. There are only a limited number of high-street banks that offer equity release plans. The main two high street banks that do so are Lloyds and Nationwide.
It is important to understand that Lloyds Banking Group also includes other banks including Halifax, Bank of Scotland and Scottish Widows. Nationwide also offers equity release, but they partner with a company called Pure Retirement in order to do so [2].
It is important to understand that if you bank with HSBC, Santander or NatWest then you will not be able to apply for an equity release scheme directly with them. Instead, you will have to talk to an equity release adviser who will be able to recommend the best equity release advisers for you [2].
There are even some things to avoid when choosing an equity release provider which is discussed more on the Equity Release Warehouse website.
Which are the best equity release lenders to go with?
There are a number of equity release companies across the UK which come highly recommended.
1. Legal & General Equity Release
Legal and General is known as one of the best equity release providers across the UK. They have won many awards for their mortgage offerings and work with their own advisers to offer you equity release plans that work for you. They do not charge for advice and also do not charge for a valuation.
2. Aviva Equity Release
Aviva offers a range of services including mortgages, financial help, healthcare and insurance. They also offer equity release plans to those aged over 55 years old. They were actually named the best equity release lender in 2020, and have won several other awards for their offerings.
In order to qualify for equity release with Aviva, then you have to be aged at least 55 years old, and own your own property in the UK worth at least £75,000. You must also be mortgage free, or at least only have a little bit of mortgage left to pay off your pre-existing and current mortgage.
3. Sun Life Equity Release
Sun Life is another really well-known equity release lender. In fact, Sun Life is now one of the top equity release lenders in the UK. They now have over 80,000 clients up and down the country, and a really good reputation for offering lifetime mortgages and home reversion plans.
4. Liverpool Victoria Equity Release
Liverpool Victoria has been offering car insurance and equity release plans for almost 20 years now and has a great reputation. They try to be as flexible as possible and offer a range of flexible plans which other lenders might not.
For example, Liverpool Victoria equity release might offer you an equity release plan on a second home, which many lenders currently do not offer. They also offer an online portal for clients and applicants to check their progress, and you will also be able to check to see your overall loan amount and interest rate.
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Why don’t more high-street banks offer equity release?
Equity release lenders exist because most banks do not offer equity release schemes. This is because banks usually struggle to fund these investments themselves, simply due to the nature of their work.
For example, they could not use their clients’ money or savings to fund these types of investments as these funds are usually offset by other products and plans.
It is also important to understand that all banks are heavily regulated by the Financial Conduct Authority (FCA).
This means that banks have to be incredibly careful when it comes to how they fund their investments and how much of the money they receive can be invested and used on different assets.
If you are wondering which banks do equity release, then speak to a member of the team at Equity Release Warehouse by calling us on 0330 058 1579. Our team will be able to educate you on which banks do equity release and which lender is best for you.
Which banks do equity release – What should I look for?
You should always check that your equity release provider is a member of the Equity Release Council.
This means that their products and offerings are standardised, and benefit from a no-negative equity guarantee, which means that your loved ones and next of kin will never be responsible for paying off the loan should your property reduce in value.
You should also look into each lender’s application and valuation fees, to make sure that you are not paying over the odds. It is also worth looking at the lenders’ ratings and reviews online, which can be easily viewed on Google after a quick search.
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Speak to Equity Release Warehouse for advice
If you are wondering ‘Which banks do equity release?’ then you should get in touch with our team at Equity Release Warehouse.
We will be able to educate you on how equity release works and will be able to explain which banks do equity release, and which lenders you would be the best choice.
Speak to the team at 0330 058 1579 or by visiting our website online at www.equityreleasewarehouse.com.
References
[1] https://www.ageuk.org.uk/information-advice/money-legal/income-tax/equity-release/
