Equity Release

You'll want to understand all the facts about equity release before you take out your plan. So, we've put together some easy-to-follow frequently asked equity release questions and answers:

What is equity release?

Equity release is a way of unlocking some of the capital that's tied up in your home to provide you with a cash lump sum.

You can continue to live in your home and you can use the money to get the most from your retirement. Whether it's for a new car, home improvements, a special holiday or simply to top up your income - it's up to you how you spend it.

Taking a lump sum, plus the costs, will reduce the value you have in your home, possibly to nothing, and therefore the value of any inheritance you leave. Your entitlement to tax and welfare benefits may also be affected.

Are you eligible for an equity release plan?

Equity release plans offered by Norwich Union are available to individuals, couples or two people living together.

To be eligible for a lifetime mortgage, an individual applicant or the youngest of joint applicants should be at least 55 years old. For a home reversion plan, an individual applicant or the youngest of joint applicants should be aged between 65 and 80.

Does your home qualify?

Your home may qualify for a lifetime mortgage or home reversion plan if it is a residential property of standard construction in England or Wales. Lifetime mortgages are also available for such properties in Scotland and Northern Ireland.

Please bear in mind that minimum property values apply. We are not able to offer equity release for properties in the Isle of Man or the Channel Islands.

How much equity can you release?

This depends on the type of plan you take out. The amount you can borrow through a lifetime mortgage is based on the value of your home and your age when you start the plan. With a home reversion plan, you can choose to sell up to 100% of your home.

However, because you can still live in your home rent-free until you die or go into long-term care, you'll receive less than the full market value of the share of your property that you sell.

Will I still own my own home?

With the lifetime mortgage, you keep ownership of your home. With the home reversion plan, the legal title of your property is transferred to the reversion provider, Grainger plc.

Both types of equity release plans offered by Norwich Union allow you to continue living in your home until you die or need to go into long-term care.

How flexible are equity release plans?

Each of the two main types of plan has its own features.

• Lifetime mortgages allow you to either take out one lump sum or, depending on the plan, release money as and when you need it. At the end of the plan, the mortgage is repaid and any remaining proceeds from the sale of your home will be left to you or your estate.

  However, the mortgage amount to be repaid will include the amount borrowed plus the interest that has built up through the life of the mortgage. This quickly increases the amount you owe and will reduce the value you have in your property, possibly to nothing.

  Find out more about the current interest rates and APRs.

• A home reversion plan would give you a cash lump sum when you take out the plan and at the end - after the reversion provider has taken its share from the sale of your home - you or your family will be paid any remaining balance.

Both types of plan also allow you to move house if you want to, if the new property meets our conditions.

Are there valuation and legal fees to pay?

The arrangement fee is deducted from the amount you receive. However, you will be required to pay a valuation fee up front. You can speak to one of our advisers to find out more.

What interest rate will be applied?

A lifetime mortgage has a higher interest rate applied to it than a standard mortgage, because you don't make any payments during the term of the mortgage. You can find out more about the current interest rates and APRs for each of our lifetime mortgages.

There aren't any interest rates with a home reversion plan because it's not a loan - you sell all or part of your property at the outset of the plan to release the capital. One of our advisers will be able to help you decide which plan best suits your personal circumstances.

Are you still responsible for maintaining the property and paying bills?

Yes, the equity release plans offered by Norwich Union require you to maintain your property and keep it in a state of good repair. It's also still your responsibility to insure your property and pay all your property-related bills, such as utilities and council tax.

Can you end the plan early?

Both the lifetime mortgage and the home reversion plan are intended to last for the rest of your life.

With a home reversion plan you can buy back the provider's share of your property, but you will have to pay the full market value, which is likely to be substantially more than the amount you received from the sale.

With a lifetime mortgage the lender does not receive any payment until the property is sold, so if you decide to repay the loan early there may be a substantial early repayment charge.

Are there any tax implications?

You don't have to pay tax on the amount you release, but it may affect your entitlement to tax and means-tested benefits.

Is equity release regulated?

Yes, the equity release plans offered by Norwich Union are regulated by the Financial Services Authority (FSA). This is an independent body reporting to Parliament that helps to ensure that financial products offered to the public are fair and meet its required standards.

Norwich Union is also a member of Safe Home Income Plans (SHIP), a voluntary organisation that specialises in equity release, and we adhere to the strict standards set out in their code of practice.

How can you be sure if it's right for you?

With our choice of equity release plans, we aim to offer you a solution that fits your personal circumstances. Even so, we recognise that equity release isn't for everyone. So, we'll take the time to listen to your needs and concerns and if we think it's not right for you, we'll tell you.

Talk to one of our advisers

Our expert advisers can answer your questions and give you all the information - and thinking time - you need. Simply book an appointment and one of our advisers will visit you at home to talk you through all the facts about equity release and the options open to you.
Any advice given will relate only to the products sold or marketed by Norwich Union.

This is a lifetime mortgage or home reversion plan. To understand the features and risks, ask for a personalised illustration.

Norwich Union Equity Release Limited. Registered in England No 3286484. Registered office 2 Rougier Street York YO90 1UU. Authorised and regulated by the Financial Services Authority.

WC07048 10/2008