There are different ways to release some equity in your home and how you do it will depend on whether there is anything left to inherit.

A home reversion scheme is where you sell all or some of your property to a financial institution. This is home owners over the age of 65 and they can get either a lump sum or income for life. They will be allowed to continue living in the property for as long as they need to. However, when the property is sold, there may not be any inheritance. It will all depend on the specific scheme used and how much money is paid out.

However, home reversion schemes are only about 10% of the market in equity release. People tend to go for a lifetime mortgage option instead. The lifetime mortgage allows you to take a lump sum or an income and you will get charged interest by the lender until the property is sold. When it is sold, the lender will need to have their lump sum and the interest repaid before the remaining money made gets distributed. This is preferred because the increase in value of the house will still benefit the home owner or those who inherit from them. It will also mean that if the home owner decides to sell the property before they die, perhaps because they are going in to a care home or because they want to down size then they will be able to sell up, pay off the loan and have the rest of the value of the house. It is therefore a more flexible scheme and the home owner has more to gain from it.

Therefore, there in many cases of releasing equity, you will still have something left in the way of inheritance. It will not be so much as if you didn’t draw out any equity as the interest will have to be paid back to the lender and this could be a significant chunk of money, but it will not remove all of the inheritance. Obviously you will have to calculate whether you think that it will still leave a significant chunk of money or not. It all depends on how desperate your need is for some money and how much you want to leave a significant chunk as part of your inheritance.