Halifax equity release

The British bank Halifax was initially founded in 1853 as a building society in the town of Halifax, England.

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The British bank Halifax was initially founded in 1853 as a building society in the town of Halifax, England. Since then, it has fallen under the Bank of Scotland, which the Lloyds Banking Group owns. Halifax is famous in the UK for its attractive interest rates and accessibility. If you’re considering the bank for its equity release products, check our overview below, where we delve into the details and benefits.

Equity release products offered by Halifax

Halifax offers a range of lifetime mortgages and home reversion plans to meet your needs. It currently doesn’t provide advice on equity release matters, so you’ll need to contact a separate advisor or go through the Equity Release Council.

Halifax equity release

It’s also important to note that many of the bank’s equity release products aren’t offered directly by Halifax but by other lenders.

It’s also important to note that many of the bank’s equity release products aren’t offered directly by Halifax but by other lenders. You can contact the bank to discuss its partnerships and the providers of specific plans.

Halifax and the lenders it represents allow you to choose from various repayment options with all equity release plans. You can opt to repay the loan and interest at the end of your plan, or you can opt to pay a bit each month.

Retirement Interest Only

Borrow a tax-free lump sum of money against the value of your property. This is an interest-only lifetime mortgage where you cover the interest payments each month to avoid a roll-up during the duration of your equity release plan. The final loan is paid when your property is sold, usually when you pass away or go into full-time care. 

Lifetime Mortgage

This type of scheme is similar to Retirement Interest Only, but instead of paying interest monthly, you don’t pay anything until the end of the term. Note that this type of plan allows interest to roll up, resulting in a much higher bill. It will also leave less money as an inheritance for your loved ones.

Home Reversion Plan

A home reversion scheme allows you to sell to the lender between 25% and 100% of your property. In return, you receive a lifelong lease that will enable you to remain in the property until you pass away or go into full-time care. Note that the price you sell the property will be much lower than its market value since you’ll get to live there rent-free, for life.

Eligibility requirements

To qualify for the bank’s equity release products, you must be at least 55 years old. That also applies to your partner if you’re submitting a joint application. Halifax will also have a minimum property value and equity release requirement, so contact the company to discuss your eligibility.

Note that most lenders will decline your application if you still have a considerable amount to pay on your traditional mortgage. So check with Halifax to see if the amount you have meets the criteria.

Features and benefits of Halifax equity release

Halifax offers an array of options to meet all your requirements. The home reversion plan is a huge plus since many lenders don’t provide that option. Its repayment flexibility is also a bonus since it allows you to stay on top of interest and leave more for your loved ones when you pass away.

Here’s an overview of the bank’s equity release benefits:

  • You retain 100% ownership of your home unless you sell it via the home reversion plan.
  • The lump-sum payment is tax-free.
  • You can use the funds however you like.
  • Flexible repayment options

How much does Halifax equity release cost?

We compare plans from the leading equity release providers

The cost of your equity release scheme will depend on various factors, such as your age, property value, the amount you plan to release, and the interest rates. The less you borrow, the less interest you pay, so ensure that you’re only releasing the amount you need. It might be tempting to release the maximum available to you, but this will result in unnecessarily high-interest rates.

Here’s an example quote to give you a better idea:

  • A 70-year-old applicant with a property worth £280,000 can borrow £118,215 at 3.72%. That would mean that when the applicant passes away, the loan would be worth £206,364. In this case, the scheme would cost nearly double the initial loan amount.

Can Halifax decline your equity release application?

Lenders can decline your application for multiple reasons. The first and most common is failure to meet the basic requirements, such as age and minimum property value.

The other reason will be regarding your property. The lender will inspect your home and check for various things. You can be declined if your home:

  • Is in poor condition.
  • Is in an area of significant commercial development or flood-risk zone.
  • Has low resale potential.

If you lie on your application, you can also encounter issues, so ensure that you provide all the correct details.

Overview of Halifax equity release plan details

Minimum equity release Contact the bank.
Minimum applicant age 55 (including joint applications)
Plan Options Lifetime Mortgage. Home Reversions.
Repayment Options End of plan. Interest-only. Principal and interest.
Second Property Equity Not available.

Halifax equity release ratings

Halifax’s equity release services are yet to be reviewed by independent rating companies such as Defaqto and Fairer Finance. If you contact the company, you can find out which lenders it works with and check if they have reviewed those.

However, the bank does have over 1,600 reviews on Smart Money People, with an average rating of 4.15 stars.

Is Halifax equity release right for you?

Halifax is an excellent choice if you already have a product with the bank and you’d like to stay within the same ecosystem. It’s essential that you check which lenders it works with to ensure that you’re happy having your equity release scheme through them.

The bank also offers a variety of products options that can meet most needs, so chances are, Halifax has something for you.