Equity release is a way of releasing the wealth tied up in your property without having to sell it and move to another home. You can either borrow against the value of your home or sell all or part of it in exchange for a lump sum or a regular monthly income. Some plans give you the option to "draw down" further equity (cash) at a later date, based on your requirements.
No, the amount of money you borrow against the value of your home, plus any rolled-up interest, can never go above the value of the property due to the no negative equity guarantee safeguard upheld by Equity Release Council members. You will continue benefitting from the rises in property value in the years to come.
Products which fully meet the Equity Release Council's product standards are required to feature a "no negative equity guarantee". Put simply, this guarantee means that you, or more specifically your estate, will never owe more than the property is worth when it is sold.
The provider will instruct a surveyor to give a professional valuation of your property that would define the amount that could be released. How much can be released is also dependent on your age and that of your partner (if you are making a joint application) and the value of your property. Some providers may offer larger sums to those with certain past or present medical conditions or even 'lifestyle factors', including smoking.
If you still have an outstanding mortgage on your property you will need to pay it off in full, either by using some of the proceeds from the equity you release or from other funds. Once that is done, the rest of the money you release can be spent as you wish.
Yes, equity release plans which comply with our full product standards give you the right to move to a "suitable alternative property". This means a property which your provider would accept if it were setting up a plan for a new customer. There are some properties which providers would not be able to accept, and this is usually because there would be restrictions on their ability to sell the property in the open market when your plan comes to an end. So, for instance, homes which are built in retirement complexes are not generally acceptable, because the provider would not be able to sell them in the open market.