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Equity Release in Scotland

Wondering what your options are for equity release in Scotland? Read our guide to find out everything you need to know.

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: June 14, 2022

For a time, equity release and lifetime mortgages in Scotland were hard to come by. There were few to no providers offering it as an option, but there was also a perceived lack of demand. That is no longer the case, however.

Here, we examine equity release schemes in Scotland, the eligibility criteria surrounding them, and who to approach for the best product for you.

Can you get equity release in Scotland?

Yes, you can now release equity from your home in Scotland as you can do in the rest of the UK. Equity release providers lend you money secured against your home and charge interest on the amount you borrow. The loan is repayable upon your death or a move into full-time care. It is usually repaid through the sale of your property.

The Scottish equity release schemes currently offered are:

Lifetime mortgage

You take out a loan with a lifetime mortgage, using your property as security. You remain the owner of your home and, in Scotland, the funds can be released to you in instalments or in a lump sum. Some providers will allow you to do a mixture of both. These different types of lifetime mortgage options are called:

  • A lump sum mortgage: You receive the entire loan at once.
  • A lifetime drawdown mortgage: You can take your loan instalments when you want.
  • An income lifetime mortgage: You receive a regular payment as an income.

Interest is accrued over the entire lifespan of the mortgage on the amount borrowed. You do not have to make any repayments until you pass away or move into full-time care.

Interest-only equity release

Interest-only equity release is similar to a lifetime mortgage, but you make regular repayments to cover the interest accrued. As a result you only have to pay back the original amount borrowed from your estate when you die or move into full-time care is therefore reduced. This means you can protect how much your estate is worth when you pass away.

Home reversion

With these plans, you sell a portion of your home to a scheme provider and are given a lump sum or equivalent monthly instalments in return. Home reversion plans are commonly not recommended by mortgage advisors as you lose ownership of that amount of your property – though you can continue to live in it rent-free.

Other disadvantages would be the price you achieve for selling a portion of your home is often less than market rates. Plus, these products are usually only available to those who are over 60, if not older.

However, an advantage is that the amount you own of your home remains the same, so you will know how much of your property you have to leave in your will.

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Equity Release Calculator

If you’d like to find out how much equity you may be able to release from your property take a look at our easy to use calculator here:

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Equity Release Calculator

You can use our equity release calculator to work out how much capital you can release from your home. Simply enter your age and the property’s value and the tool will do the rest.


Estimate if you're unsure
£
For joint applications the amount you can release is based on the age of the youngest applicant
years old

Maximum Equity you could release:

The amount is of your homes value, the maximum most borrowers your age can release.

Get Started with an Equity Release Specialist and find out exactly how much you could release.

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Does equity release work any differently in Scotland?

No, they work exactly the same as the rest of the UK. Your potential lender will want you to meet a certain set of eligibility criteria. They vary from provider to provider, but generally would focus on:

  • Your age: You need to be over 55 for these products.
  • Your life expectancy: If your life expectancy is quite short, you may find there are more providers available to lend you your maximum amount.
  • Your income: The higher, the better. The source will also be taken into account.
  • Your credit history: Lenders look more favourably on those with a good credit history. Those with bad credit can still be eligible, but they may not be able to access as much or with as preferential a rate.
  • Your property’s value: Lenders need your property to be worth at least £70,000. Others will demand it to be higher.
  • Your location: Some providers only offer equity release for particular areas.
  • Your property type: Lenders usually prefer standard construction homes. Those in a listed property, for example, may have fewer lender options.

While the rules are not different in Scotland, there are issues that are more common North of the border that can be a key consideration. For example, in addition to only lending to certain property types, some lenders will only consider equity release applications from mainland Scotland or its key towns. That doesn’t make finding a lender much more difficult if you live in the Highlands or in a listed home.

How a broker can help with equity release

A broker can be invaluable if you are looking to release equity from your home in Scotland. The process can be complex and overwhelming – which a broker can cut right through.

An expert in equity release products and providers in Scotland will advise you as to who the best lenders are for you. That means your chances of a successful application are improved. It also means you can maximise the amount released to you at the lowest available rate.

The brokers we work with will consider every aspect of your personal and financial situation to ensure you only ever apply for a product for which you are eligible. They will guide you through every step, making your entire application easier. The result is you can save yourself time, stress and money.

If you get in touch we’ll arrange for an equity release specialist to contact you directly for a free initial discussion.

Who are the best equity release providers in Scotland?

There is no one equity release provider in Scotland that is always the best. The best provider for you will be the one that you meet the requirements for and answers your needs most closely. That means the provider that loans you the maximum amount at a rate that is affordable to you – something a broker could help you achieve.

The majority of the mainstream providers in the UK now all offer equity release schemes to mainland Scotland. Some, as mentioned, will have geographical restrictions within their eligibility criteria. You will find that household names like Scottish Widows Aviva, Canada Life and Legal & General are all potential options. But that is not an exhaustive list by any means.

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Speak to an expert on equity release schemes in Scotland

The complexity of applying for an equity release scheme in Scotland can be made far easier by using a broker. The brokers we work with have access and in-depth knowledge of the entire market. They can advise you as to what the most suitable product for you is, and the most appropriate lender.

We run a free, no-obligation broker matching service to put you in touch with the best advisor for you. Call 0808 189 0463 or make an enquiry so we can match you with an equity release specialist for a free, no-obligation today.

FAQs

Can you be refused equity release?

If you do not meet the criteria required by equity release providers, your application can be refused. That’s why using a broker is so useful – they will know which providers you do meet the requirements for and advise accordingly.

Other than equity release, what other options are available?

If you find that equity release is not the right option for you, you could look to see whether remortgaging your home or extending your mortgage term answers your needs. Additionally, you could work with a broker to see if a retirement interest-only mortgage works for your situation.

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We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in equity release

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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