27/02/2020

15 mins

If you own your own home and meet the other criteria, such as being the right age and having the correct type of property, it may be possible for you to release cash from your home with Equity Release.

However, most people own their properties jointly with a spouse or partner and, as such, wonder if it’s possible to get Joint Equity Release, just like they originally had a joint mortgage to purchase the property.

The answer is yes, it is often possible to jointly release equity from your property, providing you both meet the criteria for Equity Release on an individual basis.

If you’re both of eligible age for Equity Release — 55 for a Lifetime Mortgage or 60 for a Home Reversion Plan — then you may be able to take out a joint plan. Note that some Equity Release providers may impose a higher age limit than this at their discretion.

What is Equity Release?

Equity Release is a way for people over the age of 55 to unlock cash from their homes. Rather than sell up and downsize, you either borrow against the value of your home (a Lifetime Mortgage) or sell a proportion of your home to the provider at less than the market value (a Home Reversion Plan).

You do not have to repay the sum you’ve released until you pass away or move into long-term care, at which point your home is sold and the lender recoups the money from the sale.

Equity Release can provide a funding solution for a range of issues, from the need to pay for in-home care to home improvements to adapt to reduced mobility, helping out friends and family or even a ‘holiday of a lifetime’.

Whether or not Equity Release is right for you and your partner will depend on your needs and circumstances. However, with rising house prices and longer life expectancies running the risk that pension pots won’t last through retirement, it’s increasingly an option that people are turning to to help them in their old age.

How Does Joint Equity Release Work?

Joint Equity Release works on the same principle as Equity Release but instead the amount released is in joint names, similar to the way a joint mortgage works.

Joint Equity Release can be taken out providing you’re both:

The joint owner of the home (or intend to use Equity Release to repay a mortgage to become the joint owner of a home)
Married, civil partners or living as partners
Of eligible age
Living in a home that meets the requirements for Equity Release.

As older borrowers can release more from their properties, how much you can release will be dependent on the age of the youngest person on the title deeds.

This is because, with Joint Equity Release, you don’t have to repay the debt owed to the provider until the second person on the plan either dies or moves into long-term care. This gives both you and your partner the right to live in your home for the rest of both of your lives, or at least until you can no longer live there because you have long-term care needs.

Do I Have to Use Joint Equity Release?

You may take out Equity Release as an individual because the other occupants of your home aren’t old enough to take out an Equity Release plan, may not be on the title deeds to the property, or aren’t your spouse or partner, such as your children.

However, if you take out an Equity Release plan in a single name only, there are some important issues any survivors who still live in the home might face. That’s why it’s so important to discuss Equity Release with any family you might be living with, and not just because it could affect the size of their inheritance.

Typically, a provider will insist on a joint scheme if there’s clearly a spouse or partner living in the property.

This is because if only one individual is named on the plan, the scheme finishes when they pass away or move into care and the house must be sold. If there’s still a partner living in the home at this point, then unless they can afford to repay the Equity Release provider they’ll typically have to move out so the house can be put up for sale.

Joint Equity Release: What Happens to my Home if I Pass Away?

If you take out Equity Release as a single individual, this can cause issues for any remaining occupants of the household who aren’t party to the plan.

Effectively, as soon as the Equity Release plan terminates on your death or move into long-term care, the house must be sold within 6-12 months to repay the provider.

As such, there’ll potentially be only a small window for the other occupants of your home to find somewhere new to live.

That’s why, if you have a partner, Joint Equity Release is better. This provides the security you get from knowing that, no matter which order in which you die or move into care, the remaining spouse / partner can stay in the home for as long as they live under the same terms.

Getting a New Partner

If you get married, enter into a civil partnership or start living with someone as a partner after taking out Equity Release it’s important that you tell your provider. It’s not always possible to add a new partner to the policy, which means they may not necessarily have the right to continue living in the property after you pass away or move into long-term care.

Can I Live With Someone Not Part of the Equity Release Plan?

Yes, you can share your home with others not part of the Equity Release plan. This might include children, other relatives, carers, tenants etc.

However, they will usually have had to sign a waiver of occupancy agreement when you take out the plan. This states that they will vacate the premises should you pass away or move into long-term care and means they no longer have any rights to live there. This enables the home to be sold to repay the provider.

It’s usually recommended that these individuals receive their own legal advice separate from that required to go ahead with Equity Release so they understand their tenancy position after you take out an Equity Release plan.

Equity Release Help and Advice

Drewberry has partnered with the trusted Equity Release Provider Responsible Life to offer our clients access to the best Equity Release Advice.

Responsible Equity Release was founded in 2010 and is part of the Equity Release Council. It is also authorised and regulated by the Financial Conduct Authority and is one of the largest UK equity release advisers, with access to every single provider across the marketplace. 99% of its reviews on independent reviews website Trustpilot are listed as 5-star.