Equity Release - pros and cons

[phatmanace]

I read this thread on Equity release and read quite a few of the linked articles

Long story short, my in laws are considering it for all the reasons that they are the target market. They have a nice house, zero desire to move (although they have been looking) and want some money out to enjoy travel and (in the words of my father in law) - 'enjoy maybe the last decade of our lives where we have high quality health'

My notes on the problems with ER from talking to colleagues as well as the other thread:

• High interest rate (relatively speaking)
• Charge on your house which limits what you can do / change about your house.
• Weird break clauses that ramp the interest rate if you don't close it out in, say, 10 years.
• They have a reference point from a couple of friends who have done it and feel it's worked well for them (although I'd argue until you've seen the full life cycle of the product, you can't really claim you've seen all the good and bad)

The only two positives I can observe are the following:

• they don't have to move (which to be fair has been a massive blocker for them as they basically have their perfect house and everything else they've looked at is a compromise in some way shape or form)
• straightforward to organize.

I have to confess, I feel very nervous about them going into it, mostly because of the market image and the fact it's so aggressively marketed. Thus, really wondering if:

• there is anything I've missed from either list above?
• assuming I can't talk them out of it, is there is a 'safe' way to do this ? - for example, should one get it checked by a lawyer, etc - does anyone have a reputable company that they would recommend.

I also plan to get them to compare a lifetime mortage which seems a little less beset with pitfalls

Grateful for any advice the PH massive might be able to yeild

[LeoSayer]

One thing you haven't mentioned is inheritance.

The other thing you haven't mentioned is what other assets / pensions they have eg. 2 x state pensions?

When my in-laws did ER, I was most concerned about it curtailing their ability to move / downsize in future. They live in a 3-bed detached bungalow with a massive garden that is now too big for them to maintain and thanks to poor insulation it has proved costly for them to heat in recent years.

They're now starting to show signs of wanting a smaller place but they haven't borrow so much so downsizing should still be possible.