23rd Jan 2024 
Equity release
Equity release is a significant financial decision, and many people in the UK turn to trusted voices like Martin Lewis for guidance. As the founder of MoneySavingExpert, Lewis has become a go-to source for consumers.
In this article, we explore Martin Lewis' perspective on equity release, including his warnings, recommendations, and the tools he suggests using. Whether you're considering equity release for the first time or looking to switch providers, understanding his stance mayhelp you make a more informed decision.
On this page:
Martin Lewis' views on equity release
Does Martin Lewis recommend equity release?
What are Martin Lewis' tips on equity release?
Who is Martin Lewis, the Money Saving Expert?
Why does Martin Lewis' opinion of equity release matter?
What else should you know about equity release?
Martin Lewis' views onequity release
Martin Lewisthinks equity release may be right for some homeowners over 55 who wantto access extra cash, but only after all the alternative options have been ruled out as equity release may have long-term implications.
On his website, the Money Saving Expert, Martin Lewis takes careto explainhow to release equity from your home with either a lifetime mortgage or a home reversion plan,highlighting how important it isto consider thealternatives to equity release, the impact releasing equity can haveon anyinheritance youleave andtherecent rises in interest rates. He also gives some helpful tips on equity release, which I coverlater, but in summary:
- It's best start small and take more cash when you need it
- You should only choosea plan fromanEquity Release Council member
- You must speak to a qualified financial adviser first
- Be aware that releasing equity could affect your benefits
- Ensure you are getting the best deal
- Don't make this decision alone - make sure your loved ones are involved
The Money Saving Experthas also published a comprehensiveguide to switching lifetime mortgageto help existing equity release mortgage customers save money. I'mpleased to see that this guide has also beenfact-checked by the Equity Release Council and updated in August 2024.
Compare equity release providers on our reviews page
Moreon the topics raised in this article
> Equity release explained
> Our lifetime mortgage guide
> The pros and cons of equity release
> How safe is equity release?
What does Martin Lewis say about equity release?
Martin Lewishighlights the two ways homeowners over the age of 55can release equity from their home:with a lifetime mortgage or a home reversion plan.
He also looks atequity release costs, including application and arrangement fees, average interest rates and examples of repayment costs.
The Money Saving Expert'sguide also focuses on the inevitable impact equity release has on inheritance, as a consequence of the loan usually beingrepaid from the sale of your property when you die or move into long-term care.
Despite this,Martin Lewis believes equity release maybe worth considering if you're struggling financially and have money tied up in your property, as long as youaren't precious about leaving the equity in yourhomeas an inheritance.It is, after all, your hard-earned cash.
Does Martin Lewis recommend equity release?
Martin Lewis does notexplicitly recommend equity releasebutdoes saythat, in certain circumstances, itmaybe a good way to access money tied up in your home tohelp you enjoy a more comfortableretirement. Whether it's right for you though will depend on your personal and financial circumstances.
On the flip side, he warns that it can beexpensive and rightly reinforces the point that equity release isnot a decision to be taken lightly. Herecommendsanyone thinking about equity release shouldconsider all the options and alternatives carefully first.
For example,downsizing your home is one alternative to equity release thatcould give you the money you need. If this is a viableoption for you, Martin Lewis suggests you should ideallydownsizesooner rather than later as, in his experience, the older you are the less likely you are to move.
Also, if downsizing means a location change that could leave you feeling isolated, or it means extortionate moving costs that could negate the cost-benefit of moving, equity release may be more suitable.
How much cash could you release?
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Ashley ShepherdOur founder and managing director has over 30 years’ experience in financial services including equity release.
Our equity release expert’s view on downsizing
"I agree with Martin Lewis on downsizing. He’s right to highlight it as an alternative to equity release, as moving to a smaller property allows you to release the money tied up in the value of your home without having to sell a share in it or pay compound interest on an equity release mortgage. However, in my view, there are two important considerations that he doesn’t allude to, namely, property values and the costs of downsizing.
When it comes to value, there’s a good chance your property’s worth considerably more than you paid for it - especially if you bought it a long time ago. Put it this way, according toONS house price datathe average house price for a first time buyer in 1986 was £27,000, by 2021 it was £242,000. That could mean you’ve built up a lot of equity, even if you haven’t quite paid off the mortgage.
Then there are the financial costs of moving along with the emotional costs of severing ties with a much-loved home. Which?, for instance, puts thetypical cost of moving house at nearly £12,000, based on the average house price in the UKonce you factor in stamp duty, legal fees, removals, and so on.
Still, what’s right for you will depend on your particular financial situation, any dependents, and also how you feel about your home. Before deciding whether to stay or go, talk through all your options with a qualifiedadviseras well as trusted family members".
What are Martin Lewis'tips on equity release?
As well asconsidering the alternatives andthe impact equity releasehas on inheritance, Martin Lewis offers these six tips for anyonelooking to release equity from their home:
- Don’t borrow the full amount in one go,only what you need - adrawdown lifetime mortgage gives you theflexibility to access your money as and when you need it. You only pay interest on the money you borrow, not on the funds held in reserve, which reduces the size of the loan.
- Ensure your lender is a member of the Equity Release Councilso you're protected by its safeguards. The Equity Release Council 'represents the equity release sector and exists to promote high standards of conduct and practice in the provision of an advice on equity release'. Importantly, ERC members must guarantee you'll never owe more than the value of your property.
- Get independent financial advice to ensure you make the rightdecision before releasingequity. Use the services of either an independent mortgage adviser or financial adviser with an equity release qualification.
- Check it won’t impact any benefits you currently receive,such as pension or universal credits. Your adviser should be able to help you with this.
- Existing lifetime mortgage customers may be able to switch to a better deal.If youtook out a lifetime mortgage some years ago, you might be able toswitch to a better deal. Take a look at the latest interest rate dealsfrom some of theUK's leadingequity release providers to see how they compare to what you're paying now.
- Involve loved ones in the decision-making processso they understand the implications for you and them.
Martin Lewis CBE is the founder of the Money Saving Expertand is now Chairman of the board.MSEisthe UK's biggest consumer website with over 16 million users. In September 2012, the site joined the MoneySupermarket Group but firmly maintained its independence and ethical stance of putting the consumer first.
Through his stewardship of theMoney Saving Expert,his consumer journalism,primetime show on ITV -The Martin Lewis Money Show, one of the most watched current affairs programmes in the UK- andfrequent appearances on the news, Martin Lewis iswell-known for putting people before big business and thishas won him a loyal following. In 2023 Martin Lewis became a regular host of ITV's Good Morning Britain.
Why doesMartin Lewis' opinionofequity release matter?
For many people, Martin Lewis' view on equity release will matterbecause he's known for championing consumer rights and lobbying the powers that beto help people save money and make more informed financial choices. You can get some valuable money-saving tips fromThe Martin LewisPodcastor the Money Saving Expert YouTube channel.
Also, Martin Lewis isn't tied to any company and is committed to impartiality, but do remember his views are only his views. Before committing to any equity release scheme or provider, it's important to speak toa qualified and independent equity release adviser.
What else should you know about equity release?
Whileit’s helpful to know what Martin Lewis thinks about equity release, it's also important that youunderstand the product too. Independentinformation on equity release is available from theEquity Release Council and the Money Advice Service. Our experts have also written useful guides explaining the benefits and risks of equity release in more detail:
- What are the different types of lifetime mortgage?
- How much equity can you release?
- Is equity releasesafe?
- Pros and cons of equity release
- The importance ofcomparing a wide range of providers
Try the equity release calculator
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