Equity Release mortgages

Equity release is a way for homeowners aged 55 or over to take money from the value of their home while continuing to live in it. The money can come as a single lump sum or in stages, and it is usually repaid from the sale of the home when the last borrower dies or moves into long-term care.

There are two forms. A lifetime mortgage is a loan secured on the home, and you keep ownership. A home reversion plan sells part or all of the home to a provider in return for a lump sum or income, while you keep the right to live there for life.

People use equity release to clear an existing mortgage, adapt or repair the home, help family, pay for care at home or add to retirement income. It is a long-term commitment that reduces what is left for an estate, so it is weighed against the other options before a plan is taken out.

Equity release is regulated, and plans are taken out only after advice from a qualified adviser (FCA Handbook, MCOB 8, accessed 20 Oct 2026). The step-by-step process is set out in the guide to how equity release works.

A lifetime mortgage is the most common type of equity release in the UK. You borrow against the home, keep owning it and can live there for life. Interest is usually added to the loan rather than paid, so the balance grows over time, though many plans let you make voluntary payments to slow that growth.

Plans come as a lump sum, as drawdown with a reserve to use later, or with regular interest payments. Enhanced plans can release more for people with certain health conditions, and some plans let you protect part of the home's value as an inheritance.

Most lifetime mortgage rates are fixed for life, so the cost is set at the start even though the balance compounds. The full detail is on the lifetime mortgage page.

A home reversion plan sells part or all of your home to a provider. In return you receive a lump sum or regular payments and a lifetime lease, so you can stay in the home rent-free. When the home is sold, the provider takes its share of the sale price, which includes any rise in value on that share.

The amount paid is below the market value of the share sold, because the provider waits an unknown time to receive it. Older applicants receive more for the same share. Home reversion is much less common than lifetime mortgages, but it suits some people who want a set share kept for the estate.

Home reversion providers set a minimum age, often higher than for lifetime mortgages, and a minimum property value. The share sold is fixed at the start, so the amount left for the estate is known from the outset, whatever happens to house prices or how long you live in the home. Some plans let you sell a further share later, if the provider agrees and the home still qualifies. You remain responsible for insuring and maintaining the home under the lease, and the provider can check its condition. Leaving the home early, for example to move abroad or in with family, can mean the lease ends and the home is sold.

How the plans compare, and who they suit, is explained in the home reversion guide.

Equity release is open to homeowners aged 55 or over for lifetime mortgages, and often 60 or 65 or over for home reversion, based on the youngest owner. The home must be your main residence in the UK, of a type and condition the lender accepts, and worth at least the lender's minimum value.

Any existing mortgage must be cleared when the plan starts, usually from the money released. Joint applicants are both covered, so the plan continues until the second person dies or moves into care. Other adults living in the home usually have to sign a waiver.

Leasehold homes need enough lease left to run, and some lenders decline non-standard construction or homes with agricultural ties. Health questions apply only to enhanced plans, where they can raise the amount offered rather than prevent an application.

The amount you can release depends mainly on the age of the youngest borrower and the value of the home. Older borrowers can release a larger share, because the plan is expected to run for a shorter time. Lenders set their own limits at each age, and enhanced plans can offer more where health shortens life expectancy.

An existing mortgage reduces the amount left once it has been cleared. Taking a smaller amount, or using drawdown so interest is charged only on money taken, keeps more of the home's value for later and for the estate.

The equity release calculator gives an estimate from your age and the home's value, and shows how a balance can grow over time. An adviser's illustration will give the real figures from current plans.

The main cost of a lifetime mortgage is the interest, which usually rolls up and compounds over the life of the plan. There are also advice, arrangement, valuation and legal fees at the start. On a home reversion plan the cost is the gap between the price paid for your share and its market value.

Because interest compounds, the rate and how long the plan runs matter more than the fees, and the balance can grow to a large share of the home's value. Early repayment charges can apply if the plan is repaid early, though they are usually waived on death or a move into long-term care.

Rate drivers, fees and how to compare plans fairly are covered on the equity release rates and costs page, along with the reasons rates differ from standard mortgage pricing.

Equity release plans from Equity Release Council members follow product standards. These include a no negative equity guarantee, so the debt can never exceed the sale price, the right to live in the home for life, and the right to move to a suitable new home with the plan. Lifetime mortgage rates must be fixed or capped for life.

The standards are published by the Council (Equity Release Council, Statement of Principles and product standards, accessed 20 Oct 2026). Independent legal advice is a further requirement, with a solicitor checking the terms with you separately from the adviser before the plan completes.

Advisers must hold a specialist qualification and consider the alternatives, the effect on benefits and tax, and your family's position. Free guidance on equity release is also available from the government-backed service (MoneyHelper, Equity release, accessed 20 Oct 2026).

The main advantages of equity release are tax-free money without moving, no monthly repayments on most lifetime mortgages, and protections that cap the debt at the home's value. The money can be used for almost any purpose, and drawdown lets you take it only when needed.

The main disadvantages are that the balance grows, often quickly, reducing what is left for your estate, and that early repayment can be expensive. Equity release can affect means-tested benefits, and it limits other borrowing against the home later.

Inheritance planning can also change, because the debt reduces the value of the estate for Inheritance Tax (GOV.UK, Inheritance Tax, accessed 20 Oct 2026). A fuller look at whether it suits different situations is in the guide to whether equity release is a good idea.

Alternatives include downsizing to a smaller home, remortgaging, a retirement interest-only mortgage where you pay the interest each month, or a standard later-life mortgage with repayments. Family help, savings and grants for home adaptations can also meet some needs without borrowing against the home. Each route has its own costs, checks and effect on the estate.

A retirement interest-only mortgage keeps the balance level because the interest is paid monthly, and the loan is repaid from the sale of the home (FCA PS18/5, Retirement interest-only mortgages, accessed 20 Oct 2026). It suits people with enough income to cover the payments, and is explained on the retirement interest-only mortgage page.

Downsizing can free more money than equity release and leaves no debt, but it means moving, paying stamp duty, legal and moving costs, and finding a suitable smaller home nearby. A remortgage or further advance needs monthly repayments and affordability checks, which can be harder to pass on a pension income. A standard later-life mortgage works like any repayment or interest-only mortgage, with a set term and an end date. Each option leaves a different amount for the estate, so comparing the total cost and the effect on inheritance over the same period gives the clearest picture. Grants and local authority support for adaptations are worth checking first.

The wider ways to raise money from a home, including further advances and second charge loans, are compared in the guide to releasing equity from your home.

Equity release is taken out only after regulated advice. An adviser assesses whether it suits you, compares lifetime mortgages and home reversion plans across lenders, and looks at the alternatives. The adviser must explain any fee before work starts, and a solicitor then gives independent legal advice before completion.

Advice usually begins with an initial conversation, followed by a fact-find covering income, health, the home, family and plans for the future. The adviser then sets out a written explanation of the plan, the alternatives considered, the costs and the effect on the estate. The application follows, with a valuation of the home by the lender. A solicitor then explains the offer and the plan terms, often in a meeting with you, and completion releases the money. Family members are often invited to take part in the discussions, so that everyone understands how the plan works and what it means for any inheritance.

Lenders differ on age limits, the amount offered at each age, property rules, plan features and early repayment terms. The equity release lenders page shows how they compare, and there are 19 advisers listed for equity release, compared by rating and region.