Equity release
How to access the value in your home without having to sell up or move.
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Turn your home into extra income
Equity release lets you unlock some of the money tied up in your home without selling it. It's mainly intended for homeowners aged 55 and over who want to boost their retirement income, pay off debts, or help the family. You stay in your home with no extra monthly payments - and the cash lump sum is tax-free.
How equity release works
It's a long-term loan secured against your home
With equity release, you borrow money based on the value of your home. The loan plus interest is usually repaid when you die or move into long-term care. So if your home is worth £300,000, you might release £60,000 as a tax free lump sum, and you don't need to make monthly repayments unless you want to.
- Tip: The older you are, the more equity you can typically release - because there's less risk for the lender.
The two main types of equity release
There are two main kinds of equity release in the UK: lifetime mortgages and home reversion plans. Most people choose a lifetime mortgage.
- Lifetime mortgages: You keep full ownership and can opt out of monthly interest payments, letting interest "roll up" at the end.
- Home reversion: You sell part or all of your home to a provider in exchange for cash but stay living there rent-free. Let's say you sell 50% of your home - the provider gets half the sale value when the house is sold.
- Tip: Always check the terms carefully - home reversion means giving up ownership, which could affect the inheritance you pass on.
Equity release mortgages: think it through
It'll reduce the value of your estate
The money you release - and the interest on it - gets repaid from your home's value when it's sold. That means less will go to your loved ones. Remember: if you release £50,000 now, the final repayment after interest could be £85,000 years later.
- Tip: Talk to your family so everyone understands the impact on their inheritance.
It can affect benefits and care funding
Releasing equity might change your eligibility for means-tested benefits or future care support, especially if you're claiming pension credit or council help. Getting a £30,000 lump sum, for example, could push you over a savings threshold.
- Tip: Speak to a financial advisor who understands how equity release affects state benefits and care costs.
Summing up
Equity release can be a practical solution if you're looking to access the value tied up in your home, especially during retirement. It gives you tax-free cash to spend how you like, without needing to move. But it's a big decision that affects your finances, your estate, and possibly your benefits. That's why it's good to get independent equity release advice and involve your family to discuss the long-term impact.
Frequently Asked Questions
Do I still own my home with equity release?
If you choose a lifetime mortgage, which is the most common type of equity release, you remain the full legal owner of your home. You stay living in it just as you always have. The loan and interest are repaid when the house is sold - after you pass away or move into care. With a home reversion plan, however, you sell part or all of your home to the provider, so ownership changes accordingly.
Do I still own my home with equity release?
If you choose a lifetime mortgage, which is the most common type of equity release, you remain the full legal owner of your home. You stay living in it just as you always have. The loan and interest are repaid when the house is sold - after you pass away or move into care. With a home reversion plan, however, you sell part or all of your home to the provider, so ownership changes accordingly.
Do I still own my home with equity release?
If you choose a lifetime mortgage, which is the most common type of equity release, you remain the full legal owner of your home. You stay living in it just as you always have. The loan and interest are repaid when the house is sold - after you pass away or move into care. With a home reversion plan, however, you sell part or all of your home to the provider, so ownership changes accordingly.
Can I move house if I've used equity release?
Yes, many equity release plans allow you to move to a new property in the future. Most equity release mortgages approved by the Equity Release Council include what's called "portability", meaning you can transfer the plan to a new home. The new property must meet your lender's criteria, so it's worth checking in advance if you plan to move at some point.
Can I move house if I've used equity release?
Yes, many equity release plans allow you to move to a new property in the future. Most equity release mortgages approved by the Equity Release Council include what's called "portability", meaning you can transfer the plan to a new home. The new property must meet your lender's criteria, so it's worth checking in advance if you plan to move at some point.
Can I move house if I've used equity release?
Yes, many equity release plans allow you to move to a new property in the future. Most equity release mortgages approved by the Equity Release Council include what's called "portability", meaning you can transfer the plan to a new home. The new property must meet your lender's criteria, so it's worth checking in advance if you plan to move at some point.
How much can I borrow with equity release?
The amount you can borrow depends on several factors: your age, your property's value, and your health. Generally, the older you are, the more you can release - starting from around 20% of your home's value and rising to 50% or more in your late 70s or beyond. To get a better idea of how much equity you could access, it's worth using an equity release calculator. Some providers also offer higher amounts for certain health conditions, through what's known as an "enhanced" lifetime mortgage.
How much can I borrow with equity release?
The amount you can borrow depends on several factors: your age, your property's value, and your health. Generally, the older you are, the more you can release - starting from around 20% of your home's value and rising to 50% or more in your late 70s or beyond. To get a better idea of how much equity you could access, it's worth using an equity release calculator. Some providers also offer higher amounts for certain health conditions, through what's known as an "enhanced" lifetime mortgage.
How much can I borrow with equity release?
The amount you can borrow depends on several factors: your age, your property's value, and your health. Generally, the older you are, the more you can release - starting from around 20% of your home's value and rising to 50% or more in your late 70s or beyond. To get a better idea of how much equity you could access, it's worth using an equity release calculator. Some providers also offer higher amounts for certain health conditions, through what's known as an "enhanced" lifetime mortgage.
Will I leave debt to my family?
Not if you choose a plan that includes a "no negative equity guarantee", which is standard with providers regulated by the Equity Release Council. This means your estate will never owe more than the eventual sale value of your home, even if house prices fall. Your family might inherit less, but they won't be left covering any shortfall out of pocket.
Will I leave debt to my family?
Not if you choose a plan that includes a "no negative equity guarantee", which is standard with providers regulated by the Equity Release Council. This means your estate will never owe more than the eventual sale value of your home, even if house prices fall. Your family might inherit less, but they won't be left covering any shortfall out of pocket.
Will I leave debt to my family?
Not if you choose a plan that includes a "no negative equity guarantee", which is standard with providers regulated by the Equity Release Council. This means your estate will never owe more than the eventual sale value of your home, even if house prices fall. Your family might inherit less, but they won't be left covering any shortfall out of pocket.
Will I leave debt to my family?
Not if you choose a plan that includes a "no negative equity guarantee", which is standard with providers regulated by the Equity Release Council. This means your estate will never owe more than the eventual sale value of your home, even if house prices fall. Your family might inherit less, but they won't be left covering any shortfall out of pocket.
Is equity release better than downsizing?
It depends on your priorities. Downsizing to a cheaper property can help you release cash without worrying about interest rates or reducing your inheritance, but it involves moving - maybe with less space or a different area. Equity release costs more in the long run because of the rolled-up interest, but it means you stay put. The best option will depend on your financial goals, health, and preferences.
Is equity release better than downsizing?
It depends on your priorities. Downsizing to a cheaper property can help you release cash without worrying about interest rates or reducing your inheritance, but it involves moving - maybe with less space or a different area. Equity release costs more in the long run because of the rolled-up interest, but it means you stay put. The best option will depend on your financial goals, health, and preferences.
Is equity release better than downsizing?
It depends on your priorities. Downsizing to a cheaper property can help you release cash without worrying about interest rates or reducing your inheritance, but it involves moving - maybe with less space or a different area. Equity release costs more in the long run because of the rolled-up interest, but it means you stay put. The best option will depend on your financial goals, health, and preferences.
About the author
Lawrence Howlett
Lawrence Howlett brings a results-driven mindset to his writing, shaped by over a decade of experience across finance, legal, and energy sectors. As the founder of Moneysavingadvisors, he’s built a reputation for turning complex financial concepts into clear, actionable insights for consumers. His writing stands out for its clarity, structure, and focus on delivering value.
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