An equity release may seem like a good idea if you are a retiree looking for additional income. Whether you want to vacation or you just need help making ends meet, an equity release can seem like an easy way out when no other options are available. However, there are some major downfalls to these schemes that you should consider, as well as alternatives that may be better for your situation.

The biggest downfall of an equity release is that you are taking away from your estate, and the inheritance you are leaving to your heirs. This is, however, going to happen even if you are using the scheme to avoid repossession, or if you sell your house quickly to fund your retirement. However, when you are getting a quick property sale, you are getting the full value of your home, and with an equity release you will only get a small portion of the value. And while it is true that you can stay in your home with these schemes, you can do so only while you yourself are living in the home. When you leave the home, you will have to sell and pay the company. By selling and then rent back, you can rent your home to family or friends while living at another residence, and the money need not be repaid until your estate is settled or you decide to sell.