Equity Release myths

We’ve laid to rest some of the most common conceptions about equity release, to help you to reassure your clients.

Myth 1: Clients worry they could lose their home

With a lifetime mortgage, the customer will continue to own 100% of their property and have the right to stay in their home for life, provided it remains their main residence.

Furthermore, all Equity Release Council plans offer a ‘No Negative Equity Guarantee’, which means they will never be asked to repay more than the value of their property when it is sold. It also means that the loan cannot be passed to loved ones.

Myth 2: There will be no money left for their beneficiaries

One of the most common questions we get asked is: “Can I still leave an inheritance for my children?” In short, yes.

Some plans offer an “Inheritance Protection Guarantee” which allows your client to protect a fixed percentage of their equity as an inheritance for their beneficiaries.

Myth 3: Some still think that equity release is not regulated

The fact is, all equity release plans today are regulated by the Financial Conduct Authority.

In addition, Equity Release Council (ERC) approved plans come with a set of guarantees that act to protect the client’s financial future. Bower Retirement only recommend ERC plans or those which offer the same set of guarantees.

Myth 4: “I won’t be able to move house”

Clients with an equity release plan have the right to move the plan to another suitable property without any financial penalty.

Myth 5: “I will have to make monthly repayments”

Typically, there are no monthly repayments to make with an equity release plan. However, one of the benefits of a lifetime mortgage is that the client can choose to make regular payments if they wish. In fact, your client will have the option to repay all, some, or none of the interest over the life of the plan.