Is equity release a good idea? - Telegraph

Is equity release a good idea? - Telegraph

Many older homeowners are “property rich but cash poor” and equity release schemes – sometimes known as home income plans – can provide a practical solution to that problem.

British people over 50 are estimated to have more than £750 million equity in their homes. That is, the extent to which their market value exceeds any debts attached to them. Equity release schemes enable homeowners to unlock some of the wealth they hold in bricks and mortar to spend on whatever they wish. Most entail borrowing against the property, but only repaying capital and interest when the borrower dies or moves into institutional accommodation.

Yet it is important to beware that earlier versions of these schemes ended in disaster when interest rates went up and house prices and share prices fell in the early Nineties. Thousands of pensioners ........