Can I Move House With Equity Release?

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Can I Move House With Equity Release?

Can you move house with equity release?

Yes, you may be able to move house with equity release, but it depends on the product and the new property.

Most modern lifetime mortgages are designed to let you move to a suitable alternative property. This is often called porting.

Porting means the lifetime mortgage transfers from your current home to the new home, subject to the lender?s approval.

However, moving is not guaranteed in every situation.

• The lender will usually need to check:
• the value of the new property
• the property type
• construction and condition
• location
• tenure
• lease length, if leasehold
• whether the home is saleable
• whether the property will be your main residence
• whether the loan remains within the lender?s limits
• whether any part of the loan must be repaid

If the new property meets the lender?s criteria, the move may be possible. If it does not, you may need to repay the lifetime mortgage.

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

What does porting mean?

Porting means transferring your lifetime mortgage from one property to another.

With equity release, the loan is secured against your home. If you move, the lender may allow the security to move from your old home to your new home.

• The process usually involves:
• telling the lender you want to move
• finding a new property
• asking the lender to assess the property
• arranging a valuation
• checking whether the loan amount is still acceptable
• completing legal work
• transferring the lifetime mortgage to the new home

You should not assume a property will be accepted until the lender confirms it.

If you already have equity release and are thinking about moving, speak to your adviser or lender before making commitments.

What makes a property acceptable?

Each lender has its own property criteria.

• A property may need to be acceptable in terms of:
• minimum property value
• standard construction
• good condition
• suitable location
• adequate lease length
• clear title
• residential use
• main residence status
• resale potential
• access and services
• absence of major structural issues
• acceptable occupancy arrangements

Some properties may need extra checks. Others may be declined.

This matters because a property that is suitable for you may not be suitable for the lender?s security.

For example, you may love a smaller retirement flat, but the lender may have concerns about lease terms, service charges, resale restrictions or age-restricted occupancy.

Can you downsize with equity release?

Yes, you may be able to downsize with equity release, but it needs careful planning.

If you sell your current home and buy a cheaper property, the new property may not support the same lifetime mortgage balance.

The lender may ask you to repay part of the loan so that the remaining balance fits within its lending limits for the new property.

For example, if your current home is worth more than the new home, the lender may reduce the maximum loan available. You may need to repay the difference from the sale proceeds.

Whether this creates an early repayment charge depends on the product terms and whether any downsizing protection applies.

What is downsizing protection?

Downsizing protection is a product feature offered by some lifetime mortgages.

It may allow you to repay the lifetime mortgage without early repayment charges if you downsize and the new property is not acceptable to the lender, subject to the plan terms.

The exact rules vary.

• A downsizing protection feature may depend on:
• how long the plan has been in place
• the lender?s criteria
• the reason for the move
• whether the new property is unacceptable to the lender
• whether you are repaying in full or in part
• the product terms at outset

This can be an important feature if you think you may move later.

It does not mean you can always move without cost. It means the product may provide some protection in specific situations.

Can you move to a retirement property?

Possibly, but retirement properties need careful checking.

Some retirement properties, sheltered housing, age-restricted homes or assisted living properties may be acceptable to some lenders but not others.

• Issues may include:
• lease length
• service charges
• ground rent
• resale restrictions
• age restrictions
• occupancy conditions
• management company rules
• shared facilities
• event fees or exit fees
• whether care is provided
• property value and saleability

If moving to a retirement property is part of your future plan, tell your adviser before taking equity release.

This may affect which lender or product is suitable.

Can you move closer to family?

Yes, you may be able to move closer to family if the new property is acceptable to the lender.

This is a common reason for wanting flexibility.

You may want to move closer to children, grandchildren, carers or support networks as you get older.

The lender will still assess the new property. It is not the reason for moving that matters most to the lender. It is whether the new property provides acceptable security for the lifetime mortgage.

Can you move to a cheaper area?

You may be able to move to a cheaper area, but the lower property value can matter.

If the new home is worth less than your current home, the lender may require a partial repayment.

This can reduce the amount of sale proceeds available for your move.

• You should check whether the move would still be affordable after:
• repaying any required amount
• estate agent fees
• legal fees
• removal costs
• stamp duty, if applicable
• early repayment charges, if any
• new property costs
• service charges, if relevant
• home adaptation costs

A move that looks affordable at first may be tighter once these costs are included.

Can you move to a more expensive property?

Yes, it may be possible to move to a more expensive property.

If the new property is acceptable, the lender may allow the plan to transfer.

You may also be able to borrow more, depending on your age, property value, existing loan balance, lender criteria and product rules.

Additional borrowing is not guaranteed. It would need advice, affordability or suitability checks where relevant, and lender approval.

You should also consider whether borrowing more could increase the long-term cost and reduce inheritance.

What happens if the lender rejects the new property?

If the lender rejects the new property, you may not be able to port the lifetime mortgage to it.

• Your options may include:
• choosing a different property
• repaying the lifetime mortgage
• asking whether partial repayment would help
• checking whether another lender could help
• reviewing downsizing protection
• considering a different type of mortgage
• delaying the move
• taking advice on alternatives

If you have to repay the lifetime mortgage, early repayment charges may apply unless an exemption or protection applies.

This is why you should not commit to a purchase before checking the lender?s position.

Will you pay early repayment charges if you move?

Possibly.

If you port the lifetime mortgage to an acceptable new property, early repayment charges may not apply because the loan continues.

If you repay the lifetime mortgage instead of porting it, early repayment charges may apply depending on the product.

Charges may also matter if you need to repay part of the loan because the new property is worth less.

The rules vary by lender and product. Some plans have fixed charges, some reduce over time, some are linked to market conditions and some include exemptions.

Before taking equity release, ask how early repayment charges work if you move.

Read more here: /equity-release/can-i-pay-off-my-equity-release-early/

What happens if you move into long-term care?

A lifetime mortgage is usually repaid when the last borrower dies or moves permanently into long-term care.

This is different from moving house.

If one borrower moves into care but the other borrower remains in the home, the plan may usually continue, provided the terms are met.

If the last borrower moves permanently into long-term care, the property is usually sold and the lifetime mortgage is repaid from the sale proceeds.

This should be explained before you take the plan.

Could moving affect inheritance?

Yes. Moving with equity release can affect inheritance.

If you downsize and repay part of the lifetime mortgage, this may reduce the debt and preserve more equity.

However, moving costs, property values, additional borrowing and interest build-up can all affect what is left later.

If you move to a lower-value property, there may be less property equity overall. If you borrow more on a higher-value property, the lifetime mortgage balance may increase.

Inheritance planning should be reviewed if moving is likely.

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

Could moving affect benefits?

It might.

If you sell your home, repay part of the lifetime mortgage and keep some sale proceeds in savings, this could affect means-tested benefits.

If you receive Pension Credit, Council Tax Support, help with care costs or other means-tested support, the impact should be checked before moving.

Costs such as buying a new home, adapting a property or paying moving expenses may be relevant, but benefit rules depend on your circumstances.

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

Should you tell your adviser if you may move later?

Yes. This is very important.

Future moving plans can affect product choice.

• Tell your adviser if you may:
• downsize
• move closer to family
• move to a retirement property
• move to a flat
• move to a bungalow
• relocate to another part of the UK
• move in with family
• sell and rent
• move into sheltered housing
• need care or support later

The adviser can then consider portability, downsizing protection, early repayment charges and property criteria when comparing plans.

What if you already have equity release and now want to move?

If you already have equity release, contact your lender or adviser before making firm plans.

• You should ask:
• can my plan be ported?
• what property criteria apply?
• does my plan have downsizing protection?
• would any early repayment charges apply?
• can I move to the type of property I want?
• would I need to repay part of the loan?
• how long does the process take?
• what costs should I expect?
• what happens if the new property is declined?

You may need a valuation and legal work before the lender confirms whether the move can proceed.

What alternatives should you consider?

• If moving with equity release is difficult, alternatives may include:
• choosing a different property
• downsizing without porting
• repaying the plan if affordable
• remortgaging to another later-life product
• using savings or investments
• family support
• selling and renting, with advice
• moving before taking equity release
• delaying equity release until after the move
• taking a smaller initial release
• using drawdown instead of a large lump sum

If you think moving is likely soon, it may be better to move first and consider equity release afterwards, depending on your circumstances.

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

When might moving with equity release be suitable?

• Moving with equity release may be suitable where:
• your plan allows porting
• the new property meets lender criteria
• the loan amount remains acceptable
• any required repayment is affordable
• early repayment charges are understood
• the move supports your long-term needs
• benefits and inheritance have been considered
• legal and moving costs have been included
• the new property suits later-life living

A move should be reviewed carefully before you commit.

When might it be unsuitable or difficult?

• Moving with equity release may be difficult if:
• the new property is not acceptable to the lender
• the property value is too low
• the property is unusual or hard to sell
• the lease is too short
• service charges are high or unusual
• the property has restrictive occupancy rules
• you need to repay more than you can afford
• early repayment charges are high
• you plan to move again soon
• benefits could be affected
• the move would not meet your future needs

This does not mean moving is impossible, but it means advice and lender checks are essential.

Questions to ask before taking equity release if you may move

Before deciding, ask:

• Can this lifetime mortgage be ported?
• What property types will the lender accept?
• Can I move to a flat, bungalow or retirement property?
• What happens if I downsize?
• Would I need to repay part of the loan?
• Does the plan include downsizing protection?
• How do early repayment charges work?
• Can I move to another part of the UK?
• What happens if the new property is declined?
• Can I repay the plan if I sell?
• Should I move before taking equity release?
• Could moving affect benefits?
• How would moving affect inheritance?
• What legal and moving costs should I allow for?
• Could drawdown give more flexibility?

A suitable recommendation should take future moving plans into account.