I don’t understand the jargon

Lifetime mortgages have compound interest added. This means that any interest accrued is added to the loan amount and then the future interest is charged on top.

This is a fee charged by some equity release providers of a lifetime mortgage if you decide to go ahead and pay the loan back early. Lifetime mortgages are designed to last you the rest of your life, meaning it is not expected to be repaid until your death, or entry into long term care.

Your estate refers to everything that you own, including your home, possessions and any savings or investments.

The majority of lifetime mortgages have fixed interest rates. This means that the interest rate on the plan will never change throughout its term, no matter what happens to the Bank of England base rates.

The Financial Services Authority is the main body responsible for regulating advice, including the sales of equity release schemes. Their main aim is to promote efficient and fair markets, and to ensure that all consumers are being treated fairly.

If you are releasing cash from your home through a home reversion plan then you will be given a lifetime lease which simply allows you to stay in your home rent free for the rest of your life.

This is a guarantee that comes with all SHIP (Safe Home Income Plans) approved equity release schemes. Taking out a SHIP approved plan means you will never owe more than the value of your property.

State benefits such as pension credit or council tax benefits may be affected if you release cash from your home through an equity release scheme. Speaking to an independent adviser will help you find out how you will be affected.