Equity Release Home Reversion Plans
Home Reversion Plans is the act of selling all or a share of your home but continue to have the right to live in it for the rest of your life.
Calculations for Home reversion plans are dependent on your circumstances: Your Age, The value of your property, percentage of the property you wish to surrender and the rate offered by the provider.
If you which to release 20% of the value of your property, this can cost you from 60% to 75% of the value of your home. Plans are always calculated as percentage so if the property value increases the provider will receive the same share, but a higher value.
- You must be at least 65 years old
- The lump-sum is tax-free
- No monthly payments (some providers charge a nominal rent of £12 per year)
- You can sell all or a percentage of your home
This website refers to home reversion plans and lifetime mortgages. To understand the features and risks, please ask for a personalised illustration.
Example: (Lump Sum)
The following examples are taken from www.which.co.uk who looked at the three main providers to take out a home reversion loan. This comparison was completed in February 2013
|Provider A||Provider B||Provider C|
|Value of property||£250,000||£250,000||£250,000|
|Age of youngest owner||65||65||65|
|Value to sell||(20%) £50,000||(20%) £50,000||(20%) £50,000|
|Provider share of the property offered||(72.3%) £180,750||(73.8%) £184,500||(59%) £147,500|
|Owners share||(27.7%) £69,250||(26.2%) £65,500||(41%) £102,500|
If the value of the property increases 1.5% each year for 20 years
|New Value of property||£336,714||£336,714||£336,714|
|Provider share of the property||(72.3%) £243,444||(73.8%) £248,495||(59%) £198,661|
|Owners share||(27.7%) £93,270||(26.2%) £88,219||(41%) £138,053|
Home Reversion Providers
There are 4 main providers in the UK that provide Home Reversion plans:
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