The potential pitfalls of equity release

Equity release has become one of the fastest-growing areas of personal lending in the UK in recent years. But the rapid expansion has also led to controversy with some financial analysts describing them as the ‘next big personal lending scandal’. Here, we look at the pros and cons of equity release schemes. Is the grass really greener, or are there better alternatives? What equity release? Equity release is a form of lending which allows people over the age of 55 who own their own home to borrow against the amount of equity that they have in it. People who are in their late 60s or 70s often have large amounts of money tied up in their property with no means of accessing it apart from selling up. Equity release allows them to tap into this money without having to make very large monthly repayments. That’s because, borrowers do not have to pay interest on the amount that they borrow. The interest is agreed at the outset and rolled over until the borrower dies and is then repaid w
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