Home equity release mortgages come under the general umbrella of equity release and are the most popular form of releasing equity from a property for those aged over 55.

As with any financial product there are many advantages and disadvantages to the home equity release. Some consumer organisations have called it a product of last resort and others have welcomed it as a valuable planning tool for pensioners.

The main advantages and disadvantages are listed here:

Advantages

• Typically available to those as young as 55.

• You keep ownership of your own home and could still benefit from any rises in house prices.

• You know how much money you will receive from the scheme at the outset.

• Possibility of leaving some equity to your heirs, depending on the size and length of your loan.

• Regulated by the Financial Services Authority

Disadvantages

• Your debt will grow over time, although this can be limited by only releasing money you need when you need it.

• The entire equity in your property may be exhausted, leaving nothing for your family.

• If you choose to repay the loan early, early repayment charges may apply.

• Your tax position and eligibility for means tested benefits may be affected, as might your options for moving or selling your home in the future.

As with any financial product before you purchase you should seek independent financial advice on the merits of whether it is appropriate for you. There are other home equity release schemes available such as home reversion schemes that might be more appropriate and an adviser will discuss these with you.

Interest only home equity release schemes might be more appropriate for those that have high levels of disposable income each month and can afford to repay the interest charged on these schemes. These schemes are available for reputable mortgage companies such as the Halifax.