Over the past few years, many homeowners have discovered the value of creating dedicated spaces in their gardens. Whether it’s a quiet home office, an art studio, a gym, or simply a place to unwind. These garden rooms have become more than just an extra building; they’re a way to enhance daily life without the upheaval of moving.
But transforming a garden space can come with a price tag. For homeowners over 55, there are ways to fund these improvements by tapping into the value of their property, without selling up or taking on unmanageable debt.
Garden rooms have evolved far beyond the traditional shed. They’re now thoughtfully designed retreats that support work, hobbies, health, and wellbeing. Especially in recent times, having a comfortable space at home to focus or relax has become increasingly important.
Two options commonly used by older homeowners to unlock funds are Equity Release and Retirement Interest-Only (RIO) mortgages.
Equity Release allows you to convert some of your home’s value into tax-free cash, without monthly repayments. The loan is usually repaid when you sell your home, move into long-term care, or pass away. RIO mortgages require monthly interest payments only, with the loan repaid under similar conditions. This can be a good option if you want to manage monthly outgoings more actively.
Things to keep in mind:
1. Understand the Interest Rates
Equity release rates are typically higher than standard residential mortgage rates, but have fallen in recent years. Check if rates are fixed or variable. A fixed rate gives peace of mind, especially when borrowing over the long term. For RIO mortgages, monthly interest payments are required, so ensure they fit your budget.
2. Get a Full Breakdown of Costs
Look beyond the interest rate: consider arrangement fees, legal costs, and any early repayment charges. Ask for an equity release illustration that shows the long-term impact on the value of your estate.
3. Use Equity Release Wisely
It’s best suited for funding meaningful goals, such as home upgrades, accessibility improvements, or helping family, rather than day-to-day expenses. Ensure the amount you release is sustainable for the long term.
4. Speak to a Regulated Adviser
Equity release may not be right for everyone. A qualified adviser can explain how it compares with alternatives, such as downsizing, remortgaging, or accessing other savings. We’ll also make sure you understand the impact on benefits or inheritance
Both products can help fund garden rooms, home adaptations, or other lifestyle projects, offering flexibility while allowing you to stay in the home you love.
If you’d like to explore whether these options could work for you, we are here to help guide you through the possibilities with clear, personalised advice.
SPEAK TO AN ADVISER
This is a lifetime mortgage. To understand the features and risks, please ask for a personalised illustration. Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.