Malcolm Finney looks at the two main options for equity release in relation to the family home.
Equity release is a mechanism for releasing equity effectively locked up in, typically, a family residence. It is designed for the elderly - normally those aged 60 or over - who wish to generate additional income or capital to supplement their financial resources.
The two main types of equity release scheme are the lifetime mortgage and the home reversion plan.
Lifetime mortgage
There are two types, namely interest-only mortgages or rolled up interest mortgages, the latter being the more popular. Under the former, interest payments on a monthly basis are made by the homeowner to the mortgagee, whereas under the latter no such payments are made as the interest is rolled up until the mortgage becomes
