Are you thinking about retirement and how you can make your home more energy-efficient? Well, you’re not alone! Many people are looking at ways to lower their energy bills and make their homes more comfortable. And now there’s a new way to do it, combining equity release with home improvements.
Equity release is a popular way for older homeowners to access the cash tied up in their property. Now, a new kind of equity release is emerging that specifically helps you pay for energy-saving upgrades. The Equity Release Council (ERC) has published new guidance to help lenders create products that make this possible.
What is a Retrofit Lifetime Mortgage?
A retrofit lifetime mortgage is like a regular equity release loan, but it’s specifically designed to help you pay for energy efficiency upgrades to your home. This could include things like:
- Insulating your loft: This can help trap heat in your home during the winter and reduce your heating bills.
- Installing double glazing: This can help reduce heat loss and keep your home warmer in the winter and cooler in the summer.
- Replacing your boiler with a more efficient model: A new boiler can be a big investment but can save you money on your energy bills in the long run.
- Installing solar panels: These can help you generate your own electricity, which can reduce your electricity bills.
Why Is This Important?
The UK has a target of reaching net zero emissions by 2050. That means reducing the amount of greenhouse gasses we produce. And our homes are a big part of the problem. They account for a significant amount of the UK’s carbon emissions.
By making your home more energy efficient, you’re not only saving money on your energy bills but also playing a part in protecting the environment for future generations.
How Does it Work?
The ERC’s new guidance outlines a clear process for getting a retrofit lifetime mortgage:
- Initial Retrofit Assessment: An expert will come to your home and assess what energy efficiency upgrades you need.
- Retrofit Coordinator: A dedicated coordinator will help you find the right contractors and ensure that the work is done to the highest standards.
- Equity Release Loan: Once the work is complete, you’ll be able to access the equity in your home to pay for the upgrades.
What Does the Future Hold?
The ERC hopes that this new guidance will encourage more lenders to create retrofit lifetime mortgages. They believe that this will help to make energy efficiency upgrades more accessible for homeowners and help the UK reach its net zero targets.
Retrofit lifetime mortgages are a great way for older homeowners to make their homes more energy efficient and save money on their energy bills. They can also help protect the environment for future generations. If you’re thinking about making some energy-saving improvements to your home, it’s worth talking to an equity release advisor about this new type of loan.