Equity release explained Equity release: Home reversion
Home reversion: how it works
By selling a share of your property, you become a co-owner but continue to enjoy the right to live in it for the rest of your life.
The way home reversion works makes the cost harder to estimate than with a lifetime mortgage. You surrender a percentage of your property in exchange for a sum based on its current value, but the ultimate cost is based on its price at the end of the deal.
The main providers of home reversion schemes are currently Bridgewater and Newlife.
Home reversion deals
In the same way that lifetime mortgage lenders vary the amount they are prepared to advance according to age, home reversion providers demand a bigger share of equity from younger borrowers and less from those that are older.
You can usually sell between 25% and 100% of your property to the provider, but the amount you get in return will be significantly less than that share you surrender. The older you are, the more you'll get, but at age 65, for example, a 20% advance can mean surrendering 70% of your property's value.
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- For more information on equity release, talk to our experts on the Which? Money Helpline
- Exploring your options? Read our expert guide, introduction to personal pensions
- For alternative options, take a look at our guide to annuities
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