What is equity release? In brief, it is a sort of lifetime mortgage to assist homeowners financially in retirement. The retired people and the people who are over 55 can access money locked up in their residential properties via equity release. The equity of a home is calculated excluding the amount of a secured loan from the value of the home. The term ‘equity’ refers to the cash available from the accumulated value of a property.

The cash flow from the equity value supports your basic and additional expenditures in retirement. The cash from the house equity release can be utilized for any purpose and in any way. There is no restriction from the lender on how you can spend the money. For many retirees, equity release is a good means of debt consolidation. People find it difficult to maintain credit cards and pay monthly interest on borrowed loans after they retire from profession.

You can choose between equity release schemes for lump sum and the schemes for monthly income during retirement. The term of the latter is not fixed and it runs for the rest of the retiree’s life. In case of equity release schemes for lump sum, the lenders get their payment from the final sale of the property following the death of the retirees and their spouses. The leftover money is passed onto the beneficiaries of the retirees.