Should I Wait to Take Equity Release?

Main guide

Should you wait to take equity release?

Should you wait to take equity release?

You should consider waiting to take equity release if you do not need the money now.

Equity release is a long-term commitment. With a lifetime mortgage, interest can build up over time if you do not make repayments. The earlier you borrow, the longer interest may have to roll up.

Waiting may be sensible if:

• your need is not urgent
• you are unsure how much you need
• you may move soon
• you are still considering alternatives
• you have savings you can use safely
• you may get help from family
• you are waiting for home improvement quotes
• you may downsize
• you receive means-tested benefits
• you want to preserve inheritance
• you are not emotionally ready to decide

However, waiting is not always better. If you need the money for a clear and important reason, delaying may create other problems.

The right decision depends on your circumstances, not a general rule.

You can read more about how lifetime mortgages work here: /equity-release/how-does-a-lifetime-mortgage-work/

Why might waiting be a good idea?

Waiting may be a good idea if the money is not needed yet.

The main reason is interest.

If you take equity release before you need the money, interest may start building earlier than necessary. This can increase the long-term cost and reduce the equity left in your home.

Waiting can give you time to:

• clarify why you need the money
• reduce the amount you need to borrow
• check grants or support
• compare mortgage alternatives
• speak to family
• review benefits
• consider downsizing
• get proper quotes
• avoid rushed decisions
• choose a more suitable product later

Waiting can also be useful if you are close to a birthday or age band that may improve the amount available, although this is not guaranteed.

Why might waiting be a bad idea?

Waiting may be a bad idea if you have a real and urgent need.

Delaying could be risky if:

• your mortgage term is ending
• you are at risk of arrears
• essential repairs are needed
• your home is becoming unsafe
• you need care or adaptations
• you need to reduce monthly outgoings
• your partner????????s security is at risk
• you may not meet lender criteria later
• the property may deteriorate
• your health or circumstances may change
• family support is needed now

In these cases, waiting may create stress, cost or fewer options.

The decision should be based on whether the problem can safely wait.

Does age affect how much equity release you can get?

Yes, age can affect how much you may be able to release.

In general, older applicants may be able to release a higher percentage of the property value than younger applicants. This is because the expected term of the lifetime mortgage may be shorter.

This does not mean you should always wait.

The amount available also depends on:

• property value
• lender criteria
• interest rates
• existing mortgage balance
• product features
• health and lifestyle factors, in some cases
• property type
• property condition
• market conditions

Waiting may increase the percentage available, but this can be offset if property values fall, rates rise or lender criteria change.

Read more here: /equity-release/how-much-equity-release-can-i-get/

Should you wait for lower interest rates?

Maybe, but this is uncertain.

Interest rates can change. Waiting for lower rates may help if rates fall, but they could also stay the same or rise.

It is not possible to know with certainty what rates will do.

Before waiting for rate reasons, ask:

• do I need the money now?
• how much would waiting save if rates fell?
• what happens if rates rise?
• could product criteria change?
• would the delay create other costs?
• could I borrow less now using drawdown?
• could I make repayments to reduce interest?
• are alternatives available?

If the need is not urgent, waiting may be reasonable. If the need is urgent, trying to time the market may be risky.

Read more here: /equity-release/equity-release-interest-rates-and-costs/

Should you wait because property values may rise?

Possibly, but property values can also fall.

If your property value rises, you may be able to release more later. But this is not guaranteed.

Property values depend on:

• local market conditions
• property type
• condition
• demand
• mortgage rates
• wider economy
• location
• lease length, if leasehold
• saleability

If you wait and property values rise, this may help. If values fall, the amount available may reduce.

It is usually safer to base the decision on your actual need and current suitability rather than hoping property prices improve.

Should you wait until you know the exact cost?

Often, yes.

If you are considering equity release for home improvements, adaptations, family gifting or debt repayment, it helps to know the exact amount needed.

Waiting for quotes or clearer figures may prevent borrowing too much.

For example, if you release ??£70,000 for home improvements but later only need ??£45,000, interest may build on money you did not need.

Before applying, try to confirm:

• written quotes
• mortgage balances
• repayment figures
• early repayment charges
• legal fees
• family gift amount
• care or adaptation costs
• contingency amounts
• timescales

If the cost is uncertain, drawdown may be more suitable than taking a large lump sum.

Read more here: /equity-release/lump-sum-vs-drawdown-equity-release/

Should you wait if you may move house?

Possibly.

If you plan to move soon, it may be better to move first and consider equity release afterwards.

This is because a lifetime mortgage is secured against your home. Although many plans may allow you to move to a suitable new property, the new home must meet lender criteria.

If you take equity release now and move shortly afterwards, you may face:

• property approval issues
• legal work
• valuation checks
• possible partial repayment
• early repayment charges
• reduced flexibility
• moving complications

If moving is likely within the next year or two, discuss this before applying.

Read more here: /equity-release/can-i-move-house-with-equity-release/

Should you wait if you may downsize?

Often, yes.

Downsizing can be an alternative to equity release. It may free up money without taking a lifetime mortgage.

However, downsizing is not right for everyone. It can involve emotional, practical and financial challenges.

Before choosing equity release instead of downsizing, consider:

• whether you want to stay in the home
• whether the home is suitable long term
• moving costs
• stamp duty, if relevant
• estate agent and legal fees
• availability of suitable smaller homes
• family and support networks
• accessibility
• whether downsizing would release enough money
• whether you would regret moving

If you are genuinely open to downsizing, it may be worth exploring before taking equity release.

Should you wait if you are still working?

Possibly.

If you are still working and have income, other mortgage options may be available. These could include remortgaging, a retirement interest-only mortgage, a later-life mortgage, a product transfer or using savings.

Equity release may still be suitable in some cases, but it should be compared with options that may have lower long-term costs.

If retirement is close, it may also be sensible to wait until your retirement income, pension choices and future budget are clearer.

Before deciding, consider:

• when you will retire
• what income you will have
• whether you can afford repayments
• whether mortgage alternatives are available
• whether pension decisions affect your needs
• whether you need the money now or later

Should you wait until after retirement?

Sometimes.

Waiting until after retirement may give you a clearer picture of your income, spending and future needs.

You may know:

• pension income
• state pension position
• regular bills
• mortgage affordability
• savings position
• lifestyle costs
• care or health needs
• family support needs

However, waiting until after retirement may also reduce access to standard mortgage options if your income falls.

If mortgage alternatives are possible now but may not be later, advice is important before waiting.

Should you wait if benefits could be affected?

Yes, you should check benefits before taking equity release.

If you receive, or may soon claim, means-tested benefits, equity release can affect entitlement.

Taking a lump sum and keeping it in savings may be treated as capital. This could affect benefits such as Pension Credit, Council Tax Support or help with care costs.

Waiting may be sensible if:

• your benefit position is unclear
• you are about to claim benefits
• you are unsure how much you need
• the money may sit in your account
• you have not checked drawdown
• you have not taken benefit guidance

Drawdown may reduce the amount held as savings, but it does not guarantee benefits are unaffected.

Read more here: /equity-release/equity-release-and-benefits/

Should you wait if inheritance matters?

Possibly.

The earlier you take equity release, the longer interest may have to build up. This can reduce inheritance.

Waiting may help preserve equity if you do not need the money yet.

Other ways to reduce inheritance impact may include:

• borrowing less
• using drawdown
• making voluntary repayments
• paying interest where affordable
• checking alternatives
• using savings carefully
• considering inheritance protection
• involving family in discussions

If leaving inheritance is a high priority, waiting or using another option may be more suitable.

Read more here: /equity-release/equity-release-and-inheritance/

Should you wait if you want to gift money to family?

Often, this needs careful thought.

Helping family can be important, but it should not put your own future security at risk.

Waiting may be sensible if:

• the gift is not urgent
• the amount is uncertain
• the recipient has other options
• you have not discussed fairness with family
• tax advice may be needed
• care funding could be relevant
• you are unsure whether it is a gift or loan
• you feel pressured
• your own future needs are unclear

If the family need is immediate, such as a house deposit deadline, equity release may still be considered, but only after advice.

Read more here: /equity-release/taking-equity-release-to-gift-money-to-family/

Could waiting mean you miss out on borrowing?

It is possible.

Waiting can sometimes reduce options if circumstances change.

For example:

• property values may fall
• lender criteria may tighten
• health or capacity may change
• the property may become less acceptable
• income or benefits may change
• you may need care
• mortgage arrears may worsen
• rates may rise
• products may be withdrawn

This is why ???????wait??????? is not always the safest answer.

If you think you may need equity release later, it may still be worth speaking to an adviser now to understand your options.

Could your health affect the decision?

Yes.

Some lifetime mortgage providers may offer enhanced terms based on health or lifestyle factors. This can sometimes increase the amount available.

However, health can also affect your future needs, care planning and ability to remain in the home.

If health is changing, waiting may give more clarity, but it may also create practical difficulties if decisions become urgent.

You should consider:

• whether you can safely remain in the home
• whether adaptations are needed
• whether care may be required
• whether a partner needs security
• whether moving may be better
• whether family support is available
• whether decisions should be made sooner

Health-related decisions should be handled carefully and may involve family, legal or care planning advice.

Should you wait if you only need a small amount?

Possibly.

Equity release may not be suitable for small short-term needs because fees and long-term interest can make it expensive.

Alternatives may include:

• savings
• budgeting changes
• grants
• local authority support
• family support
• delaying spending
• smaller unsecured borrowing, where suitable
• using income
• selling an asset
• phased spending

If the amount needed is small and non-urgent, waiting or using another option may be better.

What alternatives should you consider before deciding?

Before taking equity release now or later, consider:

• downsizing
• remortgaging
• product transfer
• retirement interest-only mortgage
• later-life mortgage
• savings
• investments
• pension options
• family support
• grants
• local authority support
• benefits check
• budgeting changes
• selling another asset
• delaying non-essential spending
• doing nothing for now

The right alternative depends on your need, income, property, age, benefits, family position and long-term plans.

Read more here: /equity-release/alternatives-to-equity-release/

When might waiting be suitable?

Waiting may be suitable where:

• the need is not urgent
• you do not know how much you need
• you may move or downsize soon
• you are close to retirement and income is unclear
• you may have cheaper mortgage options
• benefits need checking
• family gifting plans are uncertain
• the money would sit in savings
• grants or support may be available
• you are unsure about the decision
• inheritance is a major priority
• you need more advice

Waiting can be a positive choice if it protects you from borrowing too early or too much.

When might acting sooner be suitable?

Acting sooner may be suitable where:

• your mortgage term is ending
• arrears or repossession risk exists
• essential repairs are needed
• the home needs urgent adaptations
• monthly payments are unaffordable
• care or support needs are immediate
• family need is time-sensitive
• alternatives have been ruled out
• waiting would create more risk
• you understand the long-term cost
• benefits and inheritance have been reviewed
• the product has suitable flexibility

Taking equity release sooner should be based on a clear need, not pressure or fear.

Questions to ask before deciding whether to wait

Before deciding, ask:

• Why do I need the money?
• Do I need it now or later?
• What happens if I wait?
• What happens if I act now?
• Could the amount needed change?
• Could I borrow less?
• Would drawdown help?
• Could benefits be affected?
• How important is inheritance?
• Am I planning to move?
• Could I downsize instead?
• Are grants or support available?
• Could I remortgage or use a RIO mortgage?
• Am I waiting because it is sensible or because I feel unsure?
• Am I being pressured to act?
• What risks increase if I delay?
• What risks increase if I proceed now?

A good adviser should help you compare the consequences of acting now, waiting or using another option.