Can I move house with equity release?

Can you move home after taking equity release?

In many cases, yes. A lifetime mortgage does not necessarily mean you are trapped in your current home forever. Many modern plans allow you to move home and transfer the lifetime mortgage to a new property, provided the lender accepts the new home and the plan conditions are met.

This process is often called porting. The lifetime mortgage is moved from your existing property to the new one. The lender will usually assess the new property before agreeing.

However, moving is not guaranteed in every situation. Your new property must usually be suitable security for the lender. If it is not, the lender may refuse the transfer or require changes to the loan.

Why this matters before you apply

Moving plans should be discussed before taking equity release, not only when you decide to move. Your needs may change later because of health, family, care, location, stairs, transport or property maintenance.

If you already know you may downsize, move closer to family or buy a different type of property, your adviser should consider this when recommending a plan.

What does porting an equity release plan mean?

Porting means transferring your existing lifetime mortgage from one property to another. You sell your current home, buy a new one and the lender moves the secured loan onto the new property, subject to approval.

The lender will usually want to check the new property???s value, type, tenure, construction, condition and saleability. They will also check whether the loan remains acceptable compared with the new property value.

If the new home is similar in value and acceptable to the lender, the move may be relatively straightforward. If the new property is lower in value, the lender may ask you to repay part of the loan so the borrowing fits its criteria.

The lender may also consider whether the property is suitable for lifetime mortgage security. Some properties can be harder to accept, such as certain flats, homes with short leases, unusual construction, commercial elements, restrictive covenants or properties in poor condition.

Porting rules vary between lenders and products. That is why it is important to ask about moving home before the plan is taken out, especially if you think a move could happen later.

What happens if you downsize?

Downsizing means moving to a lower-value property. This can be possible with equity release, but it may affect the loan.

If the new property is worth less than your current home, the lender may decide that the existing loan is too high for the new property value. In that case, you may need to repay part of the lifetime mortgage from the sale proceeds before the plan can be moved.

Some lifetime mortgages include downsizing protection or features that may reduce or remove early repayment charges in certain circumstances. These features vary by lender and product and may only apply after a set period or subject to specific rules.

Downsizing protection does not automatically mean you can move to any property or avoid all repayment issues. The new property still needs to be acceptable, and the loan must still fit the lender???s criteria.

Could early repayment charges apply?

Early repayment charges may apply if you repay the lifetime mortgage earlier than expected, repay more than allowed or cannot transfer the plan to the new property.

The way early repayment charges are calculated varies. Some are fixed for a set period. Others may be linked to market conditions or product terms. This is one of the most important things to understand if you think you may move later.

If you move because one borrower has died or moved permanently into long-term care, different rules may apply depending on the plan. Your adviser should explain this before you proceed.

What if the lender will not accept the new property?

If the lender will not accept the new property, you may need to repay the lifetime mortgage from the sale of your existing home. This could trigger early repayment charges unless a relevant protection applies.

You may then need to decide whether to choose a different property, repay the plan, use other funds, or review a new later-life lending arrangement. This can create stress if it has not been planned for in advance.

For this reason, homeowners who expect to move should not focus only on the initial release amount. Moving home flexibility can be just as important.

What types of property can be harder to move to?

Lenders may be cautious with properties that could be harder to sell or value. This can include some flats, properties with short leases, retirement housing, park homes, unusual construction, ex-local authority flats in certain blocks, properties with large areas of land or homes with commercial use.

This does not mean all such properties are impossible, but they may need extra checks. If you have a preferred future property type, mention it during the advice process.

What about moving into long-term care?

A lifetime mortgage is usually repaid when the last borrower moves permanently into long-term care. This is different from an ordinary house move. If there are joint borrowers and one person moves into care while the other remains in the home, the plan may continue, depending on the terms.

Future care needs should be considered before taking equity release, especially if the property may become unsuitable later.