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Can I Take Out Equity Release On a Retirement Apartment?

We get many customers asking us ‘can I take out equity release on a retirement apartment?’

Until you contact us and inform us of your specific situation, we cannot provide you with a definite answer.

However, the general rule is that you can release equity on a retirement apartment with certain lenders. It all depends on the requirement of the lender you are with.

Ultimately, if you discover you cannot take out equity on your retirement apartment, you can either move homes and release equity on the new home, or opt for an alternative to equity release such as downsizing, using credit cards, taking out traditional loans, borrowing from loved ones, or remortgaging your home.

Please call our 24-Hour Helpline: 0330 058 1579

Who Can Release Equity?

There is no use considering releasing equity on your retirement apartment if you are not eligible for equity release in the first place.

Here are the general requirements for taking out an equity loan secured against your property:

Firstly, you must be at least 55 years old to take out a lifetime mortgage and 65 years old for a home reversion scheme.

This is not something that can be negotiated, so unfortunately you will have to look at other options if you or your partner are below the minimum age requirement.

Secondly, you have to be a homeowner. This is because the equity release lender will profit from the scheme when your home is sold when you move into care or pass away.

If your home is low in value, the risk they took in offering you a loan would not be worth it.

Finally, your property must be worth £70,000 or more. Again, this is because the equity release provider wants to ensure your property will benefit them financially when it is eventually sold.

To discover whether your property is valuable enough for equity release, you will have a valuation that is usually arranged by a solicitor.

Those are the only requirements for equity release in general. However, certain equity release plans have their own eligibility criteria. Some involve credit checks, affordability checks, and location checks. Others require you to spend the loan on something specific.

One example is that for a buy-to-let scheme, you would have to use the loan to purchase a home that you would then rent out and receive a rental income from.

The interest rate for these schemes is fixed and is accrued over time, eventually being added to the overall debt at the end of the scheme.

Another example is that for a lump sum scheme, you would receive the tax-free cash from your property all in one go, and you would not be able to withdraw any more money after that initial transaction.

The interest rate for a lump sum lifetime mortgage tends to be comparatively low as it is a widely available scheme.

Please call our 24-Hour Helpline: 0330 058 1579

What Are the Requirements For an Equity Release Retirement Flat & Which Properties Are Likely to be Rejected?

There are different requirements for equity release retirement properties depending on the lender you are with and the plan you are enrolled on.

One common requirement is that there must be a lift in your block of flats if there are more than four floors. Sometimes, your flat must not be an ex-council flat, but this does depend on the lender.

Finally, it may be a requirement that your property does not fall into the category of a studio or basement flat.

Properties with links to the commercial industry (such as B&Bs or hotels) may also be rejected.

Please call our 24-Hour Helpline: 0330 058 1579

Can I Take Out Equity Release on a Retirement Apartment: The Facts

Yes, if you seek a lender that will allow you to release equity on a retirement apartment, you could achieve this easily.

The problem is that not many lenders allow this, so you would need to do your research. We can help you with this if you call us on 0330 058 1579.

If you decide to have a consultation with an independent equity release adviser, ask them for a personal illustration that takes into account your current property type (a retirement apartment).

Otherwise, you will be wasting your time pursuing equity release as you may be rejected from a scheme if you do not make it clear that you are in a retirement apartment.

Can I Take Out Equity Release on a Retirement Apartment: Preparation

As we have said, it can be possible to release funds from a retirement apartment, but it will probably not be as easy as it would be to take out equity from an ordinary house or flat. This means preparation is incredibly important.

We recommend researching the concept of releasing equity on a retirement apartment by consulting equity release lender sites, which explain the difficulties involved with the process and the steps you can take to make the process easier for yourself (1).

Please call our 24-Hour Helpline: 0330 058 1579

Can I Take Out Equity Release on a Retirement Apartment: Speak to an Adviser

It is vital that you find an unbiased adviser to guide you through the process of releasing equity from a retirement apartment. Make sure the adviser is regulated by the FCA and a member of the Equity Release Council to ensure you are not taken advantage of.

We recommend finding a firm that will acknowledge the difficulties of releasing equity from a retirement apartment, and even the challenges involved with equity loans in general.

At Equity Release Warehouse, our specialists are always ready to inform you of the cons of equity release as we want our customers to be prepared for any complications.

According to a study by Sun Life, 9 in 10 people between the ages of 55-80 do not completely understand how equity release works, and we want to change that by empowering you with knowledge (2).

Accept our offer of a free initial consultation today and learn all about how equity release could help you and your family.

Please call our 24-Hour Helpline: 0330 058 1579

Frequently Asked Questions About Equity Release

We receive many questions from homeowners who are interested in equity release, and these span many topics, not just the topic of retirement apartments.

We wanted to address a few of the most common questions here, but for further information, see our frequently asked questions page or get a free consultation with us here.

1. Can I Move Into a Retirement Apartment After Releasing Equity?

Yes, it is an option to release equity on your current property and then move to a retirement flat afterwards if you have a lifetime mortgage.

If you did this, your lender would transfer the mortgage to the new property and make the appropriate modifications (i.e. a smaller or larger loan, different benefits).

However, it is not always easy to move home once you have committed to equity release, and it can lead to repayment charges of up to 25% of your loan amount.

What’s more, there may not be a retirement apartment that fits the criteria of your equity release lender, so the end result may be disappointing.

2. How Long Does Equity Release Take?

The length of time that it takes to get started with equity release differs for each homeowner, but we predict that it will take around 6-8 weeks for most people.

To speed up the process, do your research and make your application as soon as you are set on releasing equity, rather than putting it off.

In terms of how long the entire scheme lasts, it is designed to last until the end of your life (or until you permanently move into care), so it is certainly not a short-lived process.

With a lifetime mortgage, at the end of the scheme, your home will be sold within a year and the proceeds will go first to the equity release lender and then to any beneficiaries.

With a home reversion, the property usually must be vacated within a week and the home is sold very quickly (as the lender already has a share in it).

Please call our 24-Hour Helpline: 0330 058 1579

3. How Expensive is Equity Release?

Again, we cannot give you a specific figure for how much equity release costs. However, we can tell you which costs to prepare for, including administration fees, solicitor’s fees, advice fees, the loan itself, and interest (including compound interest).

We can also remind you that there is no obligation to repay your loan during the scheme, so you are not in debt in the traditional sense as you do not need to worry about covering the costs of the loan yourself; your assets will do that for you.

4. Does Equity Release Affect State Benefits?

Yes, equity release can impact your entitlement to means-tested benefits, but not always.

Again, this is a question you need to take to an equity release adviser and they will ensure you are enrolled on a plan that does not affect your benefits, or perhaps you will decide that it is better to take out equity and stop receiving benefits.

5. How Do I Repay an Equity Loan?

If you are enrolled on a scheme that allows you to repay the equity loan, you will do this by paying it back either in monthly installments or in sporadic payments when it suits you.

On a voluntary repayment scheme, you would pay whenever you felt able to, so this means there is never an obligation to have a certain amount of money to repay each month.

There is even an option to repay just the interest on your equity release loan, which is beneficial as the interest can rapidly build and add a huge amount to your loan. This type of equity release is known as an interest-only lifetime mortgage.

However, most of the time, equity release consumers will not be expected to repay their loan, and may face financial penalties if they do so.

For this reason, we would generally advise our customers against intending to pay back their loan while they are alive, as this tends to defeat the purpose of an equity loan.

Please call our 24-Hour Helpline: 0330 058 1579


[1] Can you get equity release on a leasehold property?

[2] Should you build equity release into your retirement strategy?

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Types of Equity Release Plans

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Equity Release Calculator

Use the equity release calculator below to discover how much money you could release from your home.

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