The financial regulator has warned homeowners to seek independent legal and financial advice before entering into an equity release scheme.
It has also implored homeowners to consider other options such as renting out a room in their house, downsizing to a cheaper property or transferring ownership of the house to a family member.
There are several different types of equity release schemes available in the Republic to homeowners aged 60 and over, but they can be broken into two main categories.
The first is known as a home reversion, where an older person sells 10-90 per cent of their property for a steeply discounted price to an equity release company, receiving a lump sum in exchange.
The home reversion company then co-owns their property. So if you sell it a 40 per cent share of your home, it will receive 40 per cent of the proceeds when the house is sold - either when you move out or after you die.
In the Republic, these schemes are sold by two companies, RRL, which was the first provider in the market, and Shared Home Investment Plan (Ship).
The amount they will pay for the same share will vary, so the very least homeowners considering this option should do is compare offers from both companies.
Ship will also pay the full market value of the share under its variable share option, but the percentage of the property that it owns will increase over time.
The other type of scheme, known as a lifetime mortgage, is sold by Bank of Ireland, Seniors Money and Ship.
Under these loans, homeowners can borrow 10-45 per cent of the home's value and take the money either in a lump sum or regular instalments, or a mixture of both.
There are no repayments due on the loan until the homeowner - or both homeowners in the case of joint borrowers - sells the property, dies or moves out of the home permanently, at which point the full balance plus interest will be due.
Bank of Ireland's product is a 15-year fixed-rate loan at a rate of 5.8 per cent APR.
Meanwhile, Ship charges a fixed rate of 6.95 per cent APR over the same period and a variable rate (capped at 7.95 per cent) of 5.95 per cent APR. Seniors Money's variable interest rate is currently 6.48 per cent APR.
Penalty interest may apply if borrowers end a fixed-rate loan early. All three companies guarantee that borrowers will never owe more than the value of the property.
Copies of the financial regulator's guide to equity release schemes, including a full list of issues older people need to consider, are available by calling its consumer helpline on tel: 1890-777777, logging on to www.itsyourmoney.ie or from its consumer information centre at College Green, Dublin.
