Equity release explained
What it is, how it works, and whether it may be suitable in later life.
Equity release allows homeowners aged 55 or over to access money from their home while continuing to live there.
It can be a useful option in some circumstances, but it is a long-term financial decision that may affect your home and inheritance. Understanding how equity release works — and the alternatives available — is an important first step.
What is equity release?
Equity release is a way for homeowners aged 55 or over to access some of the value tied up in their property, without needing to sell it or move out.
The money released can be taken as a lump sum, regular payments, or a combination of both. The amount available depends on factors such as your age, property value, and the type of plan used.
Types of equity release
Lifetime mortgages
A lifetime mortgage is the most common form of equity release. You borrow money secured against your home, while retaining ownership. Interest is added over time, and the loan is typically repaid when you pass away or move into long-term care.
Home reversion plans
With a home reversion plan, you sell a share (or all) of your home to a provider in return for a lump sum or regular income, while retaining the right to live there rent-free. These plans are less common than lifetime mortgages.
How equity release works
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You must be aged 55 or over
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Your property must meet lender criteria
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You choose how to receive the money
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Interest may roll up over time (depending on the plan)
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The loan is usually repaid later in life
Equity release products are regulated in the UK, and advice from an FCA-regulated adviser is required before proceeding.
Potential benefits of equity release
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Access money without moving home
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No mandatory monthly repayments on some plans
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Funds can be used flexibly (e.g. home improvements, supplementing income, gifting).
These benefits will vary depending on individual circumstances and the type of plan used.
Important risks and considerations
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Interest can reduce the value of your estate
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Equity release may affect inheritance
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It may impact entitlement to means-tested benefits
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Early repayment charges may apply
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Moving home later can be more complex
Because equity release is a long-term commitment, it’s important to fully understand the implications before proceeding.
Alternatives to equity release
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Support from family
In some cases, these alternatives may be more suitable than equity release, depending on your circumstances.
Is equity release right for you?
Equity release is not right for everyone. Whether it may be suitable depends on your age, income, health, property value, family situation and long-term plans.
Understanding your options first can help you decide whether speaking to a regulated adviser is the right next step.
Not sure whether equity release is suitable?
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This page provides general information only and should not be considered financial advice. Equity release products are regulated in the UK, and advice from an FCA-regulated adviser is required before proceeding.