Equity release and your home: living with a plan
Written and reviewed by the Later Life editorial teamUpdated 5 min read
Equity release and your home go together for as long as the plan runs. You keep living there, but the agreement comes with conditions. You usually need to live there as your main home, keep it insured and in good repair, and ask the lender before letting rooms, making major changes or leaving it empty for long.
This page covers what day-to-day life looks like with a plan in place. For how equity release works overall, see our equity release guide. It is general information, not financial advice.
Equity release and your home: your right to stay
Lifetime mortgages from Equity Release Council members include a right to remain. You can live in your home for life, or until you move permanently into long-term care. This applies provided the property stays your main residence and you keep to the terms of your contract.
These protections depend on meeting the conditions. The sections below cover the most common ones.
Upkeep and repairs
Your home is the lender's security for the loan. Lenders expect you to keep it in good condition, because its value repays the plan in the end.
In practice, that means keeping on top of repairs, such as roofs, damp and heating. MoneyHelper notes that plans can restrict large structural changes. Everyday adaptations, like a stairlift or grab rails, are a different matter from an extension or a conversion. Your plan documents set out which kinds of building work need the lender's consent.
Upkeep costs continue for as long as you live there. A home in poor repair can be worth less when sold, which leaves less for your estate.
Buildings insurance
MoneyHelper notes that you need buildings insurance with a lifetime mortgage, and keeping the property insured is one of the plan terms your right to remain depends on. Your plan documents set out exactly what cover is required. Home insurance policies can also have their own conditions about building work or a home left empty, so the policy wording is worth reading alongside the plan terms.
Lodgers, family and others living with you
Lodgers and letting
Plan terms may require the lender's permission before you let any part of your home, and MoneyHelper notes that you may not be able to use it as a holiday let. Where a lender agrees to letting all or part of the property, the Equity Release Council's guidance on fees lists a consent-to-let fee that can apply.
If a lodger is allowed, the Rent a Room Scheme lets you earn up to £7,500 a year tax-free from letting furnished accommodation in your home, or £3,750 if the income is shared. Lodger income can also affect means-tested benefits, so a benefits adviser can check this.
Family members and carers
The Equity Release Council says most lenders will let you share your home with a partner, son, daughter, carer or other relative. But they almost always ask that person to sign a waiver agreeing to move out once you no longer live there. Many also want them to take independent legal advice from a different solicitor.
On a joint plan, where both partners are named borrowers, the plan runs until the second borrower dies or moves into long-term care, so both have the right to stay. Our guide to joint equity release explains what happens to the survivor.
Time away from home
The plan normally ends only on death or a permanent move into long-term care, so a temporary absence, such as a holiday or a short hospital stay, does not in itself end it. MoneyHelper notes that plans can restrict leaving your home empty for long periods. If a long spell away is likely, such as extended travel or respite care, your plan terms and the lender can confirm whether any conditions apply. An empty home can also affect your home insurance cover.
Moving to another home
Plans from Council members include a right to move to another property that meets the lender's criteria. Moving somewhere cheaper may mean repaying part of the loan. Our guide to moving house after equity release explains how this works. If a move is likely, our comparison of downsizing vs equity release may help.
When the plan ends: care or death
The plan usually ends when the last borrower dies or moves permanently into long-term care. The home is then normally sold to repay the loan. The Equity Release Council says the time allowed to sell is typically between six months and a year. Until the sale, the home still needs insuring and looking after, usually by executors or attorneys.
Our article on what happens to your home if you move into care covers the wider picture.
Next step
An FCA-regulated adviser can go through the conditions that would apply to your home before you take out a plan, including lodgers, family and building work. The independent solicitor you are required to use will also explain them before you sign. We do not provide financial advice.
Frequently asked questions
Can I take in a lodger if I have equity release?
Possibly. Plan terms may require the lender's permission before you let any part of your home, so the plan documents are the place to check. The Equity Release Council's guidance on fees lists a consent-to-let fee that can apply where a lender gives permission to let all or part of a property. Lodger income may also affect means-tested benefits, and the Rent a Room Scheme sets how much you can earn tax-free.
Can my adult son or daughter live with me after I take equity release?
Usually, yes. The Equity Release Council says most lenders agree to you sharing your home with a relative or carer, but almost always ask that person to sign a waiver agreeing to move out once you no longer live there. Many lenders also expect them to take independent legal advice from a different solicitor.
Do I need to tell my equity release lender if I go into hospital?
A short hospital stay does not normally end a plan, because it usually ends only on death or a permanent move into long-term care. MoneyHelper notes that plans can restrict leaving your home empty for long periods. If you expect to be away for an extended time, for a long hospital stay, respite care or travel, your lender and your home insurer can confirm whether any conditions apply.
Can I extend or adapt my home with equity release in place?
Smaller adaptations, such as grab rails, are unlikely to raise questions, but MoneyHelper notes that plans can restrict making large structural changes. Because the home is the lender's security, plan terms may require the lender's consent before building work such as an extension or conversion. Your plan documents set out what needs consent and whether a fee applies, and the lender can confirm this before work starts.
Who looks after the house once the equity release plan ends?
When the last borrower dies or moves permanently into long-term care, the property is usually sold to repay the plan. Until then, the executors or attorneys generally look after it, including keeping it insured. The Equity Release Council says the contract sets out how long is allowed to sell, typically between six months and a year, so keeping in touch with the lender during that period matters.
