Equity Release Guide

Equity Release Guide

Equity Release Guide UK | Equity release allows homeowners aged 55 and over to access cash tied up in their property while still living there. This can provide a tax-free lump sum or regular income without requiring a move. Before proceeding, you must receive specialist mortgage advice because it affects your estate and long-term plans.

What Is Equity Release?

Equity release lets homeowners aged 55 or over access money tied up in their property without needing to move home. Your equity is the difference between your home’s market value and any mortgage that still remains. Equity release allows you to release part of this value as tax-free cash while staying in your property.

There are two main types of equity release available in the UK. The first is a lifetime mortgage, which allows you to borrow against your home and repay the loan when the property is sold. The second is a home reversion plan, which lets you sell part or all of your home to a provider in exchange for tax-free cash.

Both options let you remain in your home for life or until long-term care is needed. Each product has different rules, costs and long-term effects, so advice from an FCA-regulated mortgage adviser is essential. You can explore regulated support through our mortgage services and learn more about specialist late-life lending on our mortgage advice page.

If you are unsure whether equity release is right for your situation, our advisers can explain the risks, benefits and available alternatives in simple terms.

How Does Equity Release Work?

Lifetime Mortgage

  • You can borrow against your property, typically available from the age of 55.

  • Interest is added to the loan if you choose not to make payments, causing the debt to grow over time.

  • The loan is repaid (with interest) when you die or move into long-term care and your home is sold.

Home Reversion Plan

  • You sell all or part of your property to a provider in exchange for cash and the right to live there rent-free.

  • When the property is sold later, the provider takes their share of the proceeds.

  • This option is typically for older homeowners and may result in giving up a larger share of future property value.

How Much Can You Release?

  • With a lifetime mortgage, you might release 20 % to 60 % of your home’s value, depending on your age and property value.

  • With a home reversion plan, you may sell 25% to 100% of your home.

  • The older you are, the more you may be eligible to receive.

Who Is Eligible?

  • You must be at least 55 years old for most lifetime mortgage plans and typically 60 years old or older for home reversion plans.

  • Own your home with limited or no outstanding mortgage; property is usually worth a minimum amount (often around £70,000), depending on the provider.

  • You must receive advice from an authorised equity release specialist adviser.

Benefits & Risks

Benefits

  • Access tax-free cash from your home without moving.

  • Stay living in your home, possibly for life.

  • Reduce monthly mortgage payments if you use the cash to clear an existing mortgage.

Risks

  • The amount available for your estate or inheritance may be reduced significantly.

  • Interest can compound a large debt over time in a lifetime mortgage.

  • It may affect entitlement to means-tested benefits.

  • Not all providers allow for easy downsizing, so future moves may be restricted.

Alternatives to Equity Release

If equity release is not right for you, consider:

  • Downsizing to a smaller property and using the difference in value.

  • Remortgaging or borrowing via a standard mortgage or loan.

  • Using savings or investments to meet cash needs.
    Receiving professional mortgage advice can help you compare all these options.

How We Can Help

We provide expert advice on equity release and wider later-life lending options. Our advisers explain each product in simple terms so you understand every step.
We only work with FCA-authorised mortgage specialists, ensuring you receive regulated advice tailored to your needs. This ensures your plan is safe, compliant, and suitable for your long-term goals.

Our team also supports clients who want alternatives to equity release. These may include downsizing, remortgaging, retirement interest-only loans, or using other assets.
We assess your full financial picture before recommending any option.

You can view our full range of mortgage and protection services through our mortgage services page.  This provides information on standard mortgages, later-life lending, protection products, and general advice.

To determine if equity release is right for you, please get in touch with us today. We offer a free introductory consultation to discuss your needs and guide you through your options.

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Equity Release FAQ Guide

Question Answer (Short, Clear & SEO-Optimised)
Will I still own my home after equity release? You remain the owner with a lifetime mortgage. A home reversion plan requires selling part or all of the property.
Can I make repayments on a lifetime mortgage? Yes. Some plans allow voluntary repayments to reduce interest and protect remaining equity.
Does equity release cost more than a standard mortgage? Yes. Interest rates are higher, and the final repayment grows over time due to compound interest.
How much money can I release from my home? Most homeowners release between 20% and 60% of their property value, depending on age and home value.
Is equity release safe and regulated in the UK? Yes. All equity release products must be advised by an FCA-regulated specialist to protect consumers.
Will equity release affect my benefits? It may reduce eligibility for means-tested benefits, as cash released counts as additional income or savings.
Can I move home after taking equity release? Yes. Many plans offer “portability,” allowing you to move if the new property meets lender criteria.
What happens to the equity release debt when I die? The loan and interest are repaid from the sale of the property after death or long-term care.
Are there alternatives to equity release? Alternatives include downsizing, remortgaging, retirement interest-only loans, or using savings.
Is equity release right for people with an existing mortgage? Yes, you can use equity release to repay an existing mortgage if the equity covers the balance.
Do I need a solicitor for equity release? Yes. Independent legal advice is mandatory to ensure you understand the contract and long-term implications.
Can equity release impact my family’s inheritance? Yes. It reduces the value of your estate, which lowers the amount passed to beneficiaries.
How long does equity release take to complete? Most applications are completed in 6 to 8 weeks, depending on property valuations and legal checks.
Do I pay tax on equity release money? No. The funds released are tax-free, but they may affect how your estate is taxed later.
What property types qualify for equity release? Most standard homes qualify, but some flats, leaseholds, or non-standard builds may face restrictions.
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