This type of equity release plan (sometimes known as a reverse mortgage) is intended to produce a monthly income for life for elderly homeowners.
Although you are borrowing against the equity of your home rather than making repayments as you normally would, the loan provides for a monthly payment to the homeowner. The loan is repaid to the lender when the last homeowner passes away or moves out of the property. This can either be as a result of the property being sold or if the property is left to family members in the Will they can always choose to repay the loan balance by another means of finance, thereby keeping the property. Either way, the lender will receive what is owed to them before the estate does.
Home income plans can provide an income (which incidentally can be used for any purpose) for older people, but please consult a financial adviser if you are in any doubt and choose carefully.
