Equity Release Providers Northern Ireland

Welcome to our updated 2024 guide on equity release providers in Northern Ireland. This article aims to help you understand how equity release works and how it could benefit you financially.

We know that you might have some worries about equity release, such as your money situation and possible pitfalls. You’re not alone. Over 7,000 people visit our website each month looking for guidance on equity release.

In this article, we’ll cover:

•  The basics of equity release and how it works
•  The rules and laws around equity release in Northern Ireland
•  The warning signs you should look out for with equity release companies
•  How to get a realistic quote for equity release
•  The impact of the economy and housing market trends on equity release

Let’s get started on your journey to understanding equity release in Northern Ireland.

Is equity release available in Northern Ireland?

Yes, equity release plans like lifetime mortgages and home reversion plans are also an option if you live in Northern Ireland. 

These products work in the same way as in the rest of the United Kingdom. 

Who does equity release in Northern Ireland?

Equity release plans in Northern Ireland aren’t provided by the big banks – just like in England, Scotland and Wales. 

They’re provided by equity release companies who specialise in these plans. Some of which do offer other products, such as pensions and insurance, which makes them more well known than the rest, e.g. Aviva.

Many of the biggest equity release providers in Northern Ireland are the same companies that provide equity release throughout the rest of the UK. 

Here are some of the companies you may want to consider as part of your search, along with a flagship feature of their product:

1. LV – LV uses a fixed early repayment charge structure, which reduces to 0% after so many years of holding one of their lifetime mortgages. 

2. Aviva – A household name and one of the biggest equity release providers across the UK, including NI. 

3. More 2 Life – More 2 Life allows you to downsize and has low early repayment charges.

4. Legal & General – one of the most appealing aspects of Legal & General’s plans is that they often offer a competitive percentage of equity release, especially on high-value properties.

5. One Family –  this company’s in-house financial advice is offered for a fixed price, which might be advantageous to you. 

I always recommend that you do your own research and consider as many options as possible. The statements above were true at the time of writing. 

Will you need to speak with a financial adviser first?

As part of the equity release application process, you’ll have to speak with an equity release adviser. This person will assess your situation and consider alternative options before you can commit to equity release. 

The Equity Release Council has made it mandatory for homeowners to receive advice before signing up for a lifetime mortgage or home reversion scheme. This is just one of the strategies put in place to improve the reputation of the equity release industry and reduce the number of equity release horror stories. 

Regulatory and Legal Framework Governing Equity Release in Northern Ireland

Equity release can be hard to understand from a financial point of view. That’s why it’s very important to know the rules and laws that guide equity release providers and their plans in Northern Ireland.

The Financial Conduct Authority (FCA) is in charge of making sure that all financial actions and advice follow UK law. They add another level of protection for consumers by putting in place higher standards and safeguards. There is also The Equity Release Council, which serves as a self-regulatory body for the equity release sector, establishing a framework of principles and guidelines that go above and beyond statutory FCA regulations. Northern Irish people who are thinking about equity release are protected by a strong system that works to protect their financial and legal standing. This means that they can feel confident and safe as they go through the equity release process.

Lifetime mortgage explained

A lifetime mortgage will enable the senior homeowner to access between 20% and 60% of their residential home’s value as a loan, as long as the property isn’t secured by any debt. 

The lifetime mortgage applies a compound interest rate on the loan. But the homeowner doesn’t have to pay the loan or the interest back each month, as is normal in most loans. Instead of repaying, the debt gets bigger each month.

The lender only recovers the (growing) debt once the last surviving person named on the lifetime mortgage stops living at the property. Most people will only stop living at the property when they have passed away or moved into an elderly care residence. 

The equity release lender will recover the debt by selling the property and taking some or all of the money raised from its sale to clear what is owed. 

Home reversion scheme explained

Home reversion plans are much less common than lifetime mortgages. 

These plans ask the homeowner to sell a percentage of their property for less than its true value. For example, you might sell 30% of a £100,000 property for a £15,000 lump sum. 

The home reversion company will then receive 30% of the property’s future sale value when you have stopped living at the property, probably because you have passed away or moved into residential aged care. 

Keep in mind that the future property value may increase, giving the home reversion provider an even bigger profit on the agreement. 

Impact of the Economic and Housing Market Trends

It’s important to know how changes in the economy, housing market trends, and equity release plans are all connected, especially when thinking about the choice in the context of Northern Ireland’s fast-paced and sometimes unpredictable economy. When market conditions change, different things, like property value, interest rates, and loan-to-value (LTV) ratios, can have big effects on equity release offers.

How much do equity release advisers charge?

Equity release advisers might charge a fixed fee or they may charge a commission on your loan amount. 

Commission usually ranges between 1-2% of your loan, meaning you could pay between £500 and £1,000 for a £50,000 loan. Fixed fee advice tends to be around £1,000.

So it could be advantageous to use a fixed fee adviser if you plan to take out more than £50,000. Otherwise, a commission-based adviser may be the cheaper option. 

Does Martin Lewis recommend equity release?

Martin Lewis only recommends equity release plans to people who need the money and have no other viable alternatives. 

He takes this stance because he recognises that equity release can be a very expensive debt to repay, even if it is only repaid through your estate.