Equity release and lifetime mortgages are becoming increasingly popular as homeowners over 55 look for ways to supplement their retirement income. Despite their growing use, there’s still a lot of confusion and misinformation surrounding these financial products. At HFA Later Life, we believe in helping people make informed decisions with clarity and confidence. Let’s explore some of the most common myths about equity release and lifetime mortgages and the truths behind them.
Myth 1: You’ll lose ownership of your home
This is one of the biggest misconceptions. With a lifetime mortgage, the most common type of equity release, you retain full ownership of your home. Unlike selling your property or entering into a shared ownership agreement, a lifetime mortgage is simply a loan secured against your home. You continue to live there, and the loan is repaid only when you pass away or move into long-term care.
Myth 2: Your debt will grow uncontrollably
While it’s true that interest rolls up over time if you don’t make repayments, most modern lifetime mortgages come with interest repayment options or interest rate caps, helping you manage the balance. Some products even allow you to make voluntary payments to reduce the impact of compound interest.
Additionally, many lifetime mortgages come with a “no negative equity guarantee”. This means that you or your estate will never owe more than the value of your home, even if the property market changes.
Myth 3: You won’t be able to leave an inheritance
Many people assume equity release will wipe out any chance of leaving a financial legacy. However, you can often ringfence a portion of your home’s value to be passed on to loved ones. By carefully structuring your equity release plan, you can balance the need for funds now with your desire to leave something behind. By adding inheritance protection, it will reduce the amount you can borrow.
Myth 4: Equity release is only for people in financial trouble
While equity release can be a lifeline for those struggling financially, it’s increasingly used as a strategic financial tool. People use lifetime mortgages to fund home improvements, help children onto the property ladder, pay for travel, or simply enhance their quality of life in retirement. It’s not a last resort – it’s a choice that suits many different circumstances.
Myth 5: It’s difficult or expensive to set up
Modern equity release plans are more accessible and regulated than ever. The Equity Release Council sets strict standards to ensure consumer protection. Independent advice is a legal requirement, so you’ll be fully informed before proceeding. And while there are fees involved, many plans offer competitive rates, and some advisers (like HFA Later Life) offer free initial consultations.
Make Informed Decisions with Confidence
Equity release isn’t right for everyone—but for the right person, at the right time, it can be a valuable solution. Don’t let outdated myths or misinformation cloud your judgement. If you’re considering your later life financial options, speak with a qualified adviser who can guide you through the process clearly and honestly.
Ready to explore your options?
Contact HFA Later Life today for a free, no-obligation consultation with one of our equity release specialists. We’re here to help you understand your choices and plan a retirement that works for you.
Empower your retirement – take control of your future today.
Disclaimer
Equity release includes Lifetime Mortgages and Home Reversion Schemes. We can advise and arrange Lifetime Mortgages and will refer to an approved specialist for Home Reversion schemes.
This is a Lifetime Mortgage. These are only applicable to those 55 and over, and it could affect eligibility to state means-tested benefits and the inheritance you may leave. To understand the features and risks, ask for a personalised illustration.
