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Equity release allows homeowners aged 50 and over to access some of the value built up in their property without having to sell or move out.
The most common way to do this is through a lifetime mortgage, a type of loan secured against your home. You remain the owner and can stay living there until you pass away or move into long-term care.
What Does Equity Release Mean?
Equity release is a way to unlock some of the value in your home. This is known as equity, and it’s the difference between your property’s value and any outstanding mortgage.
The money you release is tax-free and can be used however you choose. Common reasons include helping family, funding home improvements, clearing debts or topping up retirement income.
The loan is repaid when your home is sold, typically after death or moving into care.
What is a Lifetime Mortgage?
A lifetime mortgage is the most popular equity release product. It is a loan secured against your home with no requirement to make monthly payments, unless you choose to.
Instead, the interest builds up over time and is repaid, along with the original loan, when your property is sold.
This usually happens when you pass away or move into long-term care. For joint applicants, the plan ends when both people have left the property permanently.
Every plan we recommend includes a no negative equity guarantee, which means you will never owe more than your home is worth as long as it is sold for a fair market price.
Lifetime Mortgages
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How Long Does Equity Release Take?
Most equity release cases complete within six to twelve weeks. The process involves application, valuation, legal work and final checks.
Some cases are quicker, while more complex situations can take a little longer. Working with an experienced mortgage advisor helps keep everything running smoothly.
Do You Pay Tax on Equity Release?
The money released from your home is tax-free. That said, how you use the money can sometimes affect means-tested benefits or future tax liabilities.
If you’re unsure how it might impact your situation, it’s best to speak with a qualified tax advisor before making any decisions.
How Much Equity Can I Release?
How much you can release depends on your age, the value of your home, and sometimes your health. The older you are, the more you are likely to be offered.
As a rough guide, a homeowner in their late sixties may be able to release around 30 to 40 percent of their property’s value. Some lenders offer enhanced terms for applicants with specific health conditions.
Your advisor will talk you through what’s available based on your circumstances.
Can I Get Equity Release Under 55?
Standard lifetime mortgages are typically only available from the age of 55, but if you’re aged between 50 and 54, there are still some alternatives to consider.
50+ Residential Mortgages
These are standard mortgage products designed for older borrowers, based on affordability.
Your income, credit score, and expenditure will all be assessed, and the lender will ensure the mortgage term fits within your expected retirement age or later life.
Retirement Interest-Only Mortgages (RIO)
RIO mortgages are available to homeowners over 50 in some cases. You pay the interest monthly, so the balance of your mortgage remains the same over time.
The loan is repaid when you pass away or move into long-term care, and it allows you to stay in your home without downsizing.
Traditional Remortgage
If you have sufficient equity and a stable income, you may be eligible to remortgage your property using a regular mortgage product.
This can allow you to release funds without committing to equity release or a lifetime mortgage. A mortgage broker will help assess whether this is a suitable and affordable route.
Your advisor can talk you through each of these options in more detail and help you decide which one may be most appropriate for your personal situation.
What is the Interest Rate on Equity Release?
Rates for lifetime mortgages are usually higher than standard residential rates. Most are fixed for life, which gives long-term certainty.
The exact rate depends on your age, how much you’re borrowing, and the lender’s criteria. If you choose to make interest payments or release funds in stages, this can help reduce the overall cost.
Equity Release Interest Rates
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Are There Any Alternatives to Equity Release?
Yes. Equity release is one of several options for accessing money from your home. Depending on your needs, you could also consider:
- Remortgaging to release funds using a traditional product
- Downsizing to a smaller, more affordable property
- Applying for a retirement interest-only mortgage
- Using savings or investments before borrowing
- Speaking to family about financial support
A good mortgage broker will help you weigh up every option and recommend the best approach for your situation.
How Can UK Moneyman Help?
Your advisor will walk you through the available rates and show you how they affect the total amount repayable over time.
At UK Moneyman, we specialise in mortgages for over 50s, including equity release advice. Whether you are just exploring your options or ready to move forward, our team is here to support you.
Book your free appointment today and let’s discuss what might be possible for you.
