Are there different types of equity release?
When it comes to lifetime mortgages, there are different types of plans that give you varying degrees of flexibility.
A Lump Sum plan for example pays out a single cash sum, whereas a Drawdown scheme pays out an initial tax free sum, then gives you the ability to borrow additional amounts as and when you need them.
If you prefer an equity release scheme that gives you the option to pay off some of the interest accrued, then you may be interested in an Interest Only life time mortgage but if you have health concerns, then an Enhanced lifetime mortgage can pay out more and have better rates, but only for people with certain medical conditions.
And to cater for those who want to ensure an inheritance is left for family, there are Protected equity release plans that let you protect a percentage of the value of the property.
Finally home reversion schemes are also available but with this type of plan, you sell off part or all of your home in return for a cash sum.
Equity release pros and cons