Equity release loans can be a great option for homeowners whose wealth is tied up in their home and who might not otherwise have the funds available to enjoy their retirement or achieve their financial goals.

However, before determining if a reverse mortgage is or isn’t right for you, it’s essential to consider both your current and likely future needs so that you can make an informed decision.

Firstly, make sure to think about how your needs may change in the coming years. This means assessing whether any choices you make today will still enable you to keep living a comfortable retirement down the track. Future financial requirements may involve medical expenses, aged care, home adjustments, or other unforeseen costs.

Secondly, consider how important it is to leave wealth to your family or other beneficiaries. Having an open discussion with family prior to taking out this type of loan is crucial to their understanding of your needs and your understanding of their expectations. An equity release loan will most likely reduce the amount of equity remaining in your estate so it’s best to make sure your family are on the same page before taking out a loan.

Finally, obtaining independent, financial and/or legal advice about the impacts of this type of loan, including impacts on your long-term financial situation and your pension eligibility, can help you to make the best decision.