Watch Carol Vorderman explain equity release

Last updated: 2^nd March 2023

3 min watch

Video transcript

{Carol Vorderman stands smiling in front of a white-board}

Have you ever considered how much tax-free cash, or equity, you could release from your home? Well, let’s start by looking at the rise in house prices over the years using the Government House Price Index.

In 2001, the average house in the UK cost ninety-three thousand, one hundred and thirty-six pounds.

More than twenty years later, average house prices have risen considerably: two hundred and ninety-two thousand, one hundred and eighteen pounds

Now, if you want to release some of the equity tied up in your home

and it’s worth this amount: {Carol points to a white-board with the sum saying two hundred and ninety-two thousand, one hundred and eighteen pounds} and you’re told due to your circumstances and age that you’re eligible to release say, up to half of its value, that could be the equivalent of this: {Carol points to the board with the sum saying one hundred and forty-six thousand, and fifty-nine pounds}

But let’s say you still have thirty thousand pounds left to pay on your mortgage.

First of all, you’ll need to use the equity you release to pay off that mortgage. Leaving you a potential of this much: {Carol points to one hundred and sixteen thousand, and fifty-nine pounds on the white-board} to spend however you want, such as on home improvements or helping out your loved ones.

Or, let's say your house is worth four hundred thousand pounds and you’ve paid off your mortgage.

In this case if you released fifty percent, or half of the value of your home, you’d get two hundred thousand pounds. But maybe you don’t need that much. Perhaps you just want enough money to top up your pension, so you can have a comfortable retirement. In which case, you can choose to only release, say, half of that amount. In this case, one hundred thousand pounds.

So, while the maximum amount you could release depends on the value of your home and your age, you have the freedom to decide how much of that you want.

As I demonstrated before, you don’t have to release all of the equity in one go. You can release less initially and have peace of mind knowing that you have more money available to you in the future if you need it.

And keep in mind, the amount of equity you release, plus the interest that builds up over the years, will be repaid from the sale of your house when you pass away or move into care. You can try the free SunLife equity release calculator to see how much money you could unlock.

Remember, equity release isn’t right for everyone.

You can find the full list of pros and cons of equity release here: https://www.sunlife.co.uk/equity-release/

All the best.

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