Equity Release

The term "Equity Release" appears to cover a wide range of options, including:-

• Downsizing - selling your current home in order to buy a more modest property, or to rent,

• Taking out a standard mortgage - paying back capital and interest,

• Taking out an interest only mortgage - capital is paid back on expiry of the mortgage period, or death,

• Standard mortgage tied in with an investment scheme, designed to cover the mortgage repayments plus,

• A mortgage where no capital or interest is paid until death.

Most retired ex-patriates living in Spain will probably focus on the last option, as they will want a lump sum without any monthly payments. If managed properly, this will reduce Inheritance Tax, (providing the loaned money is invested outside the reach of the Spanish Tax system). It may, of course, reduce the value of your estate.

Before you commit yourself to any of the schemes, you should take time to investigate any charges and possible risks and ideally take independent advice.