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What is Drawdown Equity Release?

Drawdown equity release is a flexible way for homeowners to access the money tied up in their property. Instead of taking a large sum all at once, drawdown equity release lets you take an initial amount of money and then withdraw more as you need it. This can be cheaper than taking a large lump sum because you only pay interest on the money you’ve taken out. It's important to know that drawdown equity release products are regulated by the Financial Conduct Authority (FCA), ensuring protection and oversight for consumers.

Key Features and Benefits

  • Flexible Withdrawals: You can take an initial lump sum and then more money when you need it.
  • Interest Savings: You only pay interest on the money you’ve taken out, not on the full amount available.
  • Financial Control: You can manage your finances better by taking out money as and when you need it.
  • Peace of Mind: You can stay in your home while unlocking some of its value .
  • No Negative Equity Guarantee: Thanks to the standards set by the Equity Release Council (ERC), you will never owe more than the value of your home.

Factors to Consider

Eligibility

Drawdown equity release is usually available to homeowners aged 55 and over with a suitable property. The amount you can release depends on your age and the value of your home. Make sure your property meets the lender's requirements, which often include the type and location of the property.

Costs

It's important to know about the interest rates and any fees that come with drawdown equity release. The interest is added to the loan, which can make the amount you owe grow over time. There may also be fees for arranging the plan, valuing your home, and legal costs. Make sure you understand all the costs involved and compare different plans.

Impact on Inheritance

Releasing equity from your home will reduce the value of your estate, which means you might leave less to your loved ones. Some plans let you protect a part of your property’s value to pass on as an inheritance. Think about how this will affect your family and talk it over with them.

Impact on State Benefits

Taking out a drawdown equity release plan can affect your eligibility for means-tested state benefits. The extra income or savings may reduce the benefits you receive. It's important to discuss this with an adviser to fully understand the implications .

Advice

It’s very important to get professional advice when considering drawdown equity release. An adviser can provide personalised recommendations based on your situation and goals. They can also help you understand the pros and cons and find the best plan for you. Speaking to an adviser is essential to ensure you are making an informed decision.

Next Steps

Choosing the right drawdown equity release plan can be complex, but getting expert advice can make it easier. By understanding your specific needs and circumstances, an adviser can help you find the best plan that provides flexible and cost-effective access to your home’s equity.

Interested in the benefits of drawdown equity release? Speak to a knowledgeable adviser who can guide you through the process and help you make the right choice.

Get Expert Drawdown Equity Release Plan Advice Now

Frequently Asked Questions

Drawdown equity release lets you take money as you need it after an initial lump sum, while lump sum equity release gives you all the money at once. Drawdown can be cheaper because you only pay interest on the money you’ve taken out.

Why Use Us?

Unbiased & Impartial - We search every equity release lender in the UK. We're an independent website with no affiliation to any equity release lender and therefore we don't promote any "special offers" from specific lenders.

Whole of Market - We search the whole of the equity release market including exclusive quotes and rates sometimes available to equity release brokers.

How It Works

  1. Complete our simple form
  2. Our partner, Unbiased, will connect you with one equity release adviser perfectly suited to meet your needs. Expect an email with their details.
  3. You'll receive a no-obligation equity release quote
  4. Your assigned broker will then contact you to schedule your first meeting.

What People Say

"He has kept me posted every step of the way and explained everything fully. There were no hidden costs. I would definitely recommend and will not hesitate to use them in the future"


"Very satisfied with the service received ! The advisor was excellent handling our equity release and was very helpful with all questions we had and changing our term twice! Thanks again!"

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*Example rate shown is from Hodge with a rate of 6.05% (12/09/2023). The rates shown are for illustrative purposes only, they should not be taken as any form of advice or recommendation. Actual mortgage quotes are based on individual circumstances.

  1. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.