As anyone looking to release equity from their home or other valuable asset will know, the business of using your property to secure a regular income has both positive and negative elements. Before you sign up for an equity release scheme, you will want to make sure that you have a handle on both of these.

If you consider only taxation on property, for example, equity release schemes appear to offer borrowers a very good deal. They provide the home owner with a steady stream of tax-free payments, apportioned from the total value of the property and this is clearly positive if you are looking to borrow money against your house.

However, in addition to this useful feature of the equity release scheme, there are also several negative repercussions which borrowers should take into account before they take out a loan. To begin with, your equity release programme is bound to decrease the amount of capital and property that you leave as inheritance to your loved ones.

As well as this, in certain countries, you will find that participation in an equity release scheme will adversely affect your means test score, and this can seriously impact the amount you are required to pay in social security benefits.

In short, equity release has both positive and negative elements, and both of these need to be considered before you embark on the process of borrowing. As with any financial decision, it is very important that you enter into the situation well-informed of all risks and benefits.