Are equity release schemes regulated?
Lifetime mortgage and home reversion companies are regulated by the Financial Conduct Authority (FCA) which means there are safeguards in place to protect you.
In addition to the FCA controls, most providers are also members of the Equity Release Council (ERC), which sets the standards for equity loans including a ‘No Negative Equity’ guarantee.
This guarantee ensures that once the property is sold and the solicitors and agents fees have been paid, if there is insufficient money remaining to pay the outstanding equity loan, neither you, your family or your estate will be liable to pay any more.
In addition, the ERC also stipulate that members allow homeowners:
- The right to remain in their home for life or as long as they choose
- The flexibility to move to another property without financial penalties
Over50choices is also a member of the Equity Release Council and authorised by the Financial Conduct Authority.
Is it secure?
Yes, as long as you ensure the provider you choose is a member of the ERC. You can use the ‘find a member’ portal on their website to find out whether your chosen equity release scheme is secure and that you are covered by the no negative equity guarantee.
But taking out an equity loan is a big decision and one that could affect your family and any benefits you may receive, so it does require careful consideration.
Which is the best equity release scheme?
If you’re considering a lifetime mortgage, it’s important to choose a company that is a member of the Equity Release Council so you know they abide by their rules and you are protected.
The 13 providers currently registered with the Council are:
- Canada Life
- More 2 Life
- Hodge Lifetime
- Responsible Lending
- Legal & General
- Retirement Plus
- One Family
- Pure Retirement
- Retirement Bridge
It’s important to seek professional advice to compare the market and decide whether equity release is a good idea for you. This can be done either through an equity release qualified IFA or an independent broker.
The benefit of using an independent broker is that they will compare equity release plans across the whole of the market and not just individual companies. This will give you a much broader view of the best and most suitable company for you.
Having reviewed the market, we have teamed up with leading award winning specialist, Age Partnership. They offer initial free no obligation help and advice, and have agreed preferential rates with leading lenders that you may not be able to get elsewhere.
They can talk through your requirements and compare leading ERC providers, review the best equity release interest rates and help you decide on the right scheme for you.