Equity release explained 2023

  • Discover what equity release means and how it could help
  • Understand how it could increase your retirement income
  • See our equity release examples to see how much you could get
  • Equity release is for over 55s - find out if you are eligibile
In this guide:  What does equity release mean - we explain what it is, how it works, how it's regulated and the lending and eligibility criteria when applying for a plan.

What is equity release and how does it work?

Call 0800 133 7656
Updated 23rd August 2023

Releasing equity is a way you can access the money tied up in your home without having to move. You continue to own 100% of your property value and the loan is only repaid once you die or move into long term care. Its essentially a long term loan for homeowners aged 55 or older.

The money you release is tax free and can be used however you wish. Perhaps for home or garden improvements, to pay off existing debts or mortgages, for holidays, to help family financially or to improve retirement funds by supplementing your pension pot.

Here's how equity release works

When releasing equity, a loan is secured against your property that is only repaid once you have died or moved into long term care and your property is sold.

Depending on the type of equity release you choose, the money can be released in a single sum, or in smaller amounts as and when you need it.

Equity release calculator

Types of equity release – what are your options?

There are two main types of equity release – a lifetime equity release mortgage and a home reversion plan. Both allow you to release money tied up in your home but in very different ways.

Here’s how the two equity release options work:

Releasing equity option one – a lifetime mortgage

A lifetime mortgage is the most popular of the two options. A loan is secured against your home in a similar way to a typical residential mortgage. The difference is that you don’t have to make any monthly repayments.

Instead the interest builds up over the years and is only repaid when the last surviving plan holder dies or moves into long term care.

Releasing equity option two – a home reversion plan

This type of equity release is different as a home reversion scheme is not a loan. With this option you agree to sell all or part of your home in return for a lump sum of money.

There’s no interest to pay however, as the value of the property increases, you only benefit from the increase on the percentage of the home that you own.

Home reversion companies take on the risk of unknown future property prices, so they are likely to offer you less than the actual property value.

When the property is sold upon the last survivor’s death (if joint) or because they’ve moved into a care home, the home reversion company will receive their share of the proceeds.

Am I eligible for equity release?

Equity release eligibility is determined by the providers lending criteria however generally the following conditions apply:

  • For a lifetime equity release mortgage you or the youngest homeowner must be 55 years of age or over
  • For a home reversion plan, you or the youngest homeowner must be 65 years of age or over
  • Some lenders impose an upper age limit of 90 while others have no upper age limit
  • Your property must be in the UK or Northern Ireland and your main residence
  • Your property must be worth at least £70,000 and in good condition

If you have an existing mortgage you can still release equity from your home. However, that mortgage would need to be fully paid off with the money that is released.

releasing equity

Equity release examples by age and property value 

To help explain more about how much you can borrow with equity release mortgages, here are some examples of releasing equity by age and property value:

Your age
Examples of a lifetime equity release mortgage maximum borrowing by age and the value of your home
Home value £150,000 £200,000 £300,000 £400,000 £500,000 £1,000,000
Over 55 £32,250 £43,000 £64,500 £86,000 £107,500 £215,000
Over 60 £39,750 £53,000 £79,500 £106,000 £132,500 £265,000
Over 65 £47,250 £63,000 £94,500 £126,000 £157,500 £315,000
Over 70 £54,750 £73,000 £109,000 £146,000 £182,500 £365,000
Over 75 £62,250 £83,000 £124,500 £166,000 £207,500 £415,000
Over 80 £69,750 £93,000 £139,500 £186,000 £232,500 £465,000
Up to 84 £75,750


£151,500 £202,000 £252,500 £505,000
These figures are a guide, as at 17th April 2023; use the online calculator to obtain a personalised illustration.  

What else can affect your eligibility for equity release?

In addition to age and property value, the type of property can also affect your eligibility for equity release.

Most standard construction properties ie. brick, stone, tiled or slate roofed houses, flats and bungalows) are acceptable. Some lenders will also consider releasing equity on properties with certain non-standard features such as annexes and flat roofs, however these would be dealt with on a case-by-case basis, with some construction types presenting more challenges.

An advantage of releasing equity is that your income and expenditure do not affect your eligibility, simply because there are no monthly repayments to be made.  Lenders are also more relaxed if you have a poor credit history, although this might depend on how bad the situation is.

Can you be refused equity release?

Your property and personal circumstances will impact your eligibility for equity release meaning you could be refused.  Although your credit score will not impact your eligibility as such, you may also be refused equity release if you have any outstanding IVA’s or County Court Judgements (CCJ’s).

However, the main reasons for being refused equity release are usually connected with the state of your property.

The lending criteria for equity release is based on the value of the property rising over time, meaning lenders look closely at issues that could affect the value of the property and subsequently the ability to sell it.

Criteria vary between lenders, but the most common reasons given for refusing equity release are:

  • ‘non-standard’ construction
  • Risk of flooding
  • Ex local authority
  • Proximity to commercial property or electricity
  • Flat roofs and single skin structures
  • Poor condition and upkeep
  • The presence of asbestos

Ways to contact us

Call 08001337380
Call 0800 133 7656
Arrange a callback
Arrange a callback
Try the calculator
Try the calculator
Email us
Email us

Is equity release regulated by the FCA?

The Financial Conduct authority is responsible for the regulation of equity release meaning you are protected by their rules and principles as long as the provider is authorised. In addition to the FCA’s safeguards, you also have access to the Financial Service Ombudsman and the Financial Services Compensation Schemes should the need arise.

As well as being regulated by the FCA, most equity release providers are also members of the Equity Release Council. The ERC sets the standards for equity release which includes the right to remain in your home for life or as long as you choose, flexibility to move to another property without financial penalty and the ‘No Negative Equity’ guarantee.

The no negative equity guarantee is extremely important as it ensures that once the property is sold and the solicitors and agents fees have been paid, if there is insufficient money remaining to pay the outstanding equity loan, neither you, your family or your estate will be liable to pay any more.

Over50choices is also a member of the Equity Release Council.best equity release advice

How to release equity from your home

If you’re considering releasing equity from your property, free help and advice is available. If you want to see how much cash you could release, try our easy to use, quick calculator.

If you are ready to talk to someone and compare equity release plans, most brokers offer free initial advice so you can discuss your options and see if it is suitable for you.

Or if you’re still uncertain, you may want to consider the alternatives to understand if a better solution is available.

We know it's a big decision!

To help you understand more about how equity release could work for you, we work in association with Age Partnership one of the UK's leading equity release specialists.

To find out how much cash you could release using their services, click on the button below.

Try the calculator

Did you find this information helpful?

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Age Partnership

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Our aim is to provide you with clear and accurate information to help you research your chosen financial products and services. The material on this site is for general information only and does not constitute any form of advice or recommendation.

If a link has an * by it, it means it is an affiliated link to an insurance company or broker that may result in a payment to the site. Should you use the equity release calculator, speak to an Age Partnership adviser and take out a plan out using their services, we receive a commission, however this will not affect the price you pay.

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None of the above arrangements constitute advice or recommendations, as other products and companies are available. You should always obtain independent, professional advice for your own situation.

The information provided on this site is accurate at the date of publication, occasionally however, things will change before we have had the opportunity to update them, so please do check. Always do your own research and take independent advice.

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Over50choices is an independent company and regulated by the FCA (No.594280) for insurance products only and a member of the Equity Release Council.

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