If you’re over the age of 55, equity release offers you a way to use the value of your home to raise money.

It is advised that you seek Independent Legal advice before entering into a legally binding equity release contract.

Why do people consider Equity Release?

1. To provide an additional income
2. To provide lifetime gifts to relatives
3. For home improvements
4. For holiday home purchase
5. To fund long term care

Equity Release will reduce the value of your estate and can affect your eligibility for means tested benefits.

Tax treatment varies according to individual circumstance and is subject to change

How Does Equity Release Work?

Equity release on the front of it is rather simple although receiving specialist advice is key to ensure that you are getting the most appropriate advice and the most suitable solution(s) for your individual circumstances. Taking advantage of an equity release scheme allows you to extract cash from the equity you have built up in your current home without the need to sell your existing property. Equity release often does not require a monthly payment as the balance and associated costs are settled with the lender from your estate. This is great for clients who may be retired or no longer want to worry about monthly payments of a loan.

How much could you borrow to purchase your second home using the equity in your current property?

The amount of equity you can release depends on several factors; these include:

  • Value of your current property
  • Homeowners Age

To find out exactly how much you can borrow contact us today on 01489 876574 and we will be happy to provide you with these details. Good news is that income and credit score are not factors so if you have been unsuccessful with a standard mortgage for your second home due to these reasons and you are over 55 equity release may be a viable option for you to buy a second home.

Equity Release FAQ

With any financial decision it is completely personal to you. At Primary Financial Solutions, we will work with you to understand your needs and advise you in the most suitable way for your individual circumstances.

If you are buying a second property using money from your equity release timescales are crucial. On average an equity release, application takes 6-8 weeks to complete.

Yes, there is the possibility that the level of your income and/or capital could affect the benefits that you are eligible to receive. Whether it’s right for you will depend on your personal and financial circumstances.

What are the tax implications when releasing money via equity release?

The amount of equity released is tax-free which is a positive for many people who decide to use the equity that they have built up to buy a holiday home. Although this does not mean you will not be charged taxes when purchasing your second home. This also depends on which location you purchase. Below you will see a guideline of stamp duty costs for purchasing a second home in the UK.

Band Rate
Up to £250K 0%
£250,001+ to £925K 8%
£925,001+ to £1.5M 13%
£1.5M+ 15%

If you are planning on buying a second home abroad we strongly recommend that you ask your international estate agent about charges and local taxes that you may be subject to. Many of our clients have also asked their international estate agent to put them in touch with previous clients who have carried out similar transactions to get a first-hand honest insight into the property buying process in that country.

What Types of Second Homes Could You Buy After Releasing Equity from Your Main Residence?

Once you have released equity from your current home you can use the equity release to fund a purchase of a second home holiday home or a buy to let property. You can also purchase properties that may not normally be mortgageable like a mobile home or park chalet. Equity release gives you the same buying power as a cash buyer as you will be exactly that in the eyes of anyone selling you your second home a cash buyer.

Releasing equity from your current property to purchase a second home is a viable option for many people who want the benefits of having a second property without the additional monthly payments. If you have always dreamed of having a holiday home by the coast or a property abroad while keeping your family home close to family and friends contact the team at Primary Financial Solutions today and our team of advisors will work with you.

Releasing equity is not taxed. How you choose to use, or not use the money could land your family with an inheritance tax bill. It is particularly important to make them aware of the 7 year inheritance tax liability. Speak to an advisor to see if there are also other options available to you, for example Retirement Interest Only Mortgages.

Why Choose Primary Financial Solutions When Releasing Equity To Buy Another Home?

  • Qualified Financial Advisors
  • Compliant Advice
  • We Treat Customers Fairly

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