SunLife equity release could help bridge the financial gap faced by homeowners nearing retirement.

Did you know that, according to a 2023 survey by the Department for Work and Pensions, 38% of working people are not saving enough for retirement?¹ 

In this article, we’ll introduce SunLife and explain its equity release options, cover the financial impacts, and provide a step-by-step guide to the application process.

We’ll also discuss the risks, potential drawbacks, and how equity release affects your estate. 

COMMENT: TimeBank.org.uk is an independent third-party data provider, and the information shared here reflects their views alone, not necessarily those of SunLife. This article is for informational purposes only and should not be considered financial advice or a recommendation to engage with any products offered by SunLife.

Who Is SunLife, and What Do They Do?

SunLife is a well-known financial services company, primarily catering to the needs of people over 50.

They offer a range of products, including life insurance, funeral plans, and equity release advice services.

They focus on offering solutions that help individuals manage their finances more effectively during their retirement years. 

What Equity Release Products Does SunLife Offer?

SunLife offers a range of lifetime mortgages called Sunrise lifetime mortgages.

How It Works

Like all products in this category, a Sunrise lifetime mortgage allows homeowners to borrow against the value of their property without being compelled to make repayments.

Instead, the loan is usually repaid from the sale of the home when the borrower passes away or moves into long-term care.

Costs

A number of costs may apply to a Sunrise lifetime mortgage.

These may include:

• Legal fees
• Valuation fees
• Application fees
• Product fees
• A completion fee
• Buildings insurance

Before committing to a plan, make sure your advisor has discussed all the potential costs with you in detail.

Who Qualifies for SunLife’s Lifetime Mortgage?

To qualify for SunLife’s lifetime mortgage, several criteria have to be met.

These are:

• Age: Prospective borrowers must be at least 55 years old.
• Property value: Your home must be worth at least £99,000.
• Residence: You must be a UK resident (but not living in Northern Ireland).

Benefits of SunLife Equity Release Plans

The benefits of SunLife equity release plans include their flexibility.

The full benefits are:

• Protection when downsizing: If you sell your property and move to a home that doesn’t meet the lender’s criteria, you can repay your loan early without incurring an early repayment charge (ERC).
• Flexible partial repayments: While repayments are not mandatory, you can choose to pay up to 10% of your loan’s value each year without facing an ERC, helping you reduce your overall debt.
• Fixed early repayment charges (ERCs): Enjoy the certainty of knowing exactly what you’ll need to pay if you decide to repay your loan early, even within the first eight years.
• No early repayment charges for joint borrowers: Joint borrowers won’t face any ERC if one borrower passes away or enters long-term care.
• Portability of your plan: Your plan can be transferred to a new home if you move, provided the new property meets the lender’s criteria.

Always remember to discuss the potential risks and drawbacks with your advisor when considering the advantages.

Drawbacks of SunLife Equity Release Plans

The drawbacks of SunLife equity release plans are the same as those of other lifetime mortgages.

These include:

• Compound Interest Accumulation: You’ll pay interest not only on the amount borrowed but also on the interest already added to the loan, meaning the total debt can grow rapidly over time.
• Reduced Inheritance: Releasing equity decreases the value of your estate, which may leave little or no inheritance for your family.
• Impact on Tax and Benefits: Equity release could affect your tax position and may reduce eligibility for means-tested benefits.
• Limited Borrowing Options: You may be unable to borrow additional funds in the future, depending on your circumstances and the terms of your plan.
• Additional Fees: There will be extra costs involved, although you can use part of the funds released to cover these.
• Existing Mortgage: If you already have a mortgage, you’ll need to use the released funds to repay it first.
• Early Repayment Charges: Paying off the loan early may incur early repayment charges, depending on the terms of your agreement.

Does SunLife Offer Equity Release Advice?

Yes, SunLife offers equity release advice through the SunLife Equity Release Service.

SunLife Equity Release Service is a trading name of Key Advice Solutions Limited.

Why Should You Consider SunLife Equity Release Advice?

You may consider SunLife equity release advice for a number of reasons.

These include:

• Expert Guidance: SunLife’s advisers are members of the Equity Release Council (ERC), ensuring they adhere to high standards and provide reliable advice.
• High Rating: SunLife has a five-star Defaqto rating.²
• Tailored Solutions: They help you find the best equity release scheme suited to your individual circumstances.
• Comprehensive Support: SunLife advisers assist you throughout the entire process, from understanding the pros and cons to helping with the application.

By seeking professional advice from SunLife, you can make an informed decision and ensure that equity release is the right choice for you and your family.

What to Remember When Considering SunLife’s Advice

When considering SunLife’s advice, remember that their advisors are tied to the Sunrise range.

However, if your advisor feels a Sunrise lifetime mortgage would not suit your needs, they may refer you to an alternative product.³

How Does SunLife Equity Release Impact Your Finances?

SunLife equity release provides a lump sum or supplemental income, which can impact your long-term financial health and estate planning.

How Will SunLife Equity Release Affect Your Retirement Income?

SunLife equity release can significantly affect your retirement income by providing a lump sum or regular payments that supplement your existing funds. 

This influx of cash can be used for various purposes, such as covering living expenses, paying for home renovations, or even funding leisure activities, thus enhancing your financial flexibility during retirement.

What Are the Costs and Fees Associated with SunLife Equity Release?

The costs and fees associated with SunLife equity release typically include an arrangement, legal, and appraisal fees for your property. 

It’s important to consider these costs, as they will impact the total amount you owe. 

Additionally, some plans may have ongoing service charges or early repayment charges, depending on the specifics of your agreement.

How Does Interest Accumulate on SunLife Equity Release?

Interest on SunLife equity release accumulates on a compound basis; this means that interest is added to the principal loan amount over time, and future interest accrues on this increased balance. 

The rate at which interest accumulates will affect the final amount you will owe when the plan ends, typically when you sell your home, move out, or pass away. 

It’s crucial to understand how this compounding interest can grow over time, as it will decrease the equity left in your home.

How Can You Apply for SunLife Equity Release?

To apply for SunLife equity release, contact their team for an initial consultation, followed by a property evaluation and financial assessment.

What Steps Are Involved in Applying for SunLife Equity Release?

To apply for SunLife equity release, begin by scheduling a consultation with one of their equity release specialists—this step is crucial as it ensures that all your questions are answered and that equity release is the right choice for your financial circumstances. 

Next, you will be guided through a detailed application process that assesses your needs and eligibility.

What Documents and Information Do You Need?

For the application, you will need to provide various documents, including proof of identity (like a passport or driver’s license), proof of residence, and details of your property, such as a recent mortgage statement and a council tax bill. 

Additionally, you will need to submit financial statements that detail your income, assets, and debts. 

These documents help SunLife assess the equity available in your home and tailor the equity release plan to your specific financial situation.

Alternative Options to SunLife Equity Release

Alternative options to SunLife equity release include downsizing, taking out a different type of loan, or exploring other financial investments to support retirement.

What Other Equity Release Options Are Available?

Other equity release options available include home reversion plans, where you sell a part or all of your property to a reversion company in exchange for a lump sum or regular payments while retaining the right to live in your home. 

Are There Other Financial Products to Consider?

If you’re exploring alternatives beyond equity release, consider products such as retirement interest-only (RIO) mortgages, which allow retirees to borrow against their equity while making monthly interest payments.

You may also want to think about remortgaging, though the availability of this option may be limited depending on your provider’s age requirements.

Contact SunLife

You can contact SunLife in more than one way.

These include:

• By phone: 0800 633 55 66.
• By requesting a callback: Fill in the online form.⁴
• By post: 1 Wythall Green Way, Wythall, Birmingham, B47 6WG.

Common Questions

Conclusion

SunLife’s equity release options provide a practical solution for homeowners looking to unlock the value of their property while remaining in their home.

With features such as downsizing protection, flexible repayment options, and the ability to transfer your plan if you move, these plans offer flexibility and peace of mind.

However, it’s essential to consider the potential drawbacks, including the impact on inheritance and future borrowing.

By weighing the benefits and limitations, you can determine whether SunLife equity release is the right choice for your financial needs.