One type of scheme is a lifetime mortgage. This is one of the most well-known equity release schemes, although it is not always fully understood. It works a bit like a traditional mortgage in that the bank lends the cash to the borrower, but instead of buying a house, it can be used for other purposes. However, as with a traditional mortgage, the loan is secured against the property’s value, so it is repaid when the property is eventually sold.
Another option is the fixed-repayment mortgage. In this instance, any interest payments are removed and instead, one defined amount is chosen. When the home is sold, the money is repaid at a fixed price. Alternatively, a home reversion plan can be explored: this would involve the outright sale, although your loved one would be permitted to remain living there until they die without paying any rent.
Whatever scheme is chosen, you must understand the long-term consequences. Those who are beneficiaries of any will that the loved one might have made or will make may also want to be consulted, as there could be bills to pay after the death of your loved one if the equity release scheme cannot settle the loan.