Standard Life equity release review

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What equity release products are on offer?

The products are:

• Lifetime Mortgage. A loan secured by your main property. You retain 100% ownership of it. Interest builds up throughout the term of the loan, but there is no obligation to make a repayment until after you die or move into long-term care.
• Drawdown Lifetime Mortgage. A lifetime mortgage where you take your loan as several smaller payments over time, rather than one lump sum.
• Interest-Only Lifetime Mortgage. With this lifetime mortgage, you’re obligated to make monthly interest payments. You’ll repay the capital out of your estate from the sale of your home after you die or move into long-term care.
• Home Reversion Plan. You sell a percentage of your home to the lender (for well under market value) in order to receive a lump sum. The lender will sell the property after the customer dies or moves into long-term care, taking a percentage of the funds as agreed in the plan.

With both products, you can remain living in your property for as long as you wish.

With a lifetime mortgage, interest can compound quickly leaving little to leave to your beneficiaries, but you’ll never owe more than the total value of your home.

With a home reversion plan, you sell a percentage of your home for well under market value, but there is no danger of interest payments spiralling out of control.

How does it work?

The maximum amount you can borrow will depend on your age, the value of your home and the amount of equity you’re willing to release.

There is an online calculator on the Standard Life website, which will give you a good estimate of how much money you can access.

You’ll have to pay an adviser fee (at least £1,695 or 2.25% of your initial advance), a valuation fee and legal fees.

After a successful application, your initial lump sum will be transferred to you. With a lifetime mortgage, your interest will begin to build from day one. The interest rate will be fixed throughout the term of the mortgage.

You can make early repayments on these products if you wish, but you may face a hefty early repayment charge for doing so.

Is Standard Life equity release safe?

All lifetime mortgages and home reversion plans are regulated by the FCA. You’ll need to apply with the help of a financial adviser.

With all of these products, there is no danger of owing the lender more than the value of your property.

Still, these products will have a hugely negative impact on the amount of money you leave for your heirs after you die.

Eligibility criteria

• You must be at least 55 years old.
• You must be a homeowner.
• The amount you can borrow will depend on the value of your home.
• If you have an existing mortgage, you’ll have to pay it off with the lump sum received.

How to apply

You can begin your application by calling 0800 056 1606 or requesting a callback at standardlife.co.uk.

Pros and cons

Our verdict

Standard Life is one of the few equity release providers that offers both lifetime mortgages and home reversion plans. There are several types of lifetime mortgage available too. Your financial adviser will help you figure out which product is best for you.

Frequently asked questions

• What interest rate will I pay on my lifetime mortgage?

  This depends on your individual circumstances. You’ll be offered an interest rate after the lender processes your application and completes a valuation on your home.

• What happens if I want to move home?

  All equity release products are “portable”, so you can take your plan with you when moving home. A partial repayment may be required when downsizing.

• Is it possible to pay off my mortgage or buy my property back?

  Yes, but you may face a huge early repayment charge on a lifetime mortgage. With a home reversion plan, you’ll need to buy your equity back at current market value.