What is equity release?

It’s fair to say that for many of us, our home is our greatest asset so unlocking some of this cash could be an option worth considering. Equity Release schemes are regulated by the Financial Conduct Authority which means that there are safeguards in place to protect you.

So just what is Equity Release and is it something worth considering?

Equity release is a way of unlocking the cash tied up in your home, giving you a tax free lump sum of money.

The 'equity' in your home is the difference between its value and any outstanding loans secured against it, such as a mortgage. 

Releasing the equity in your home could enable you to release a cash sum to spend as you wish; that holiday you have always wanted, an extension or maybe just some extra money to make life that bit easier!

Typically there are no repayments to make and you can live in the property until you die or move into long term care.

You can release equity through either a Lifetime Mortgage or Home Reversion Plan, both of which are explained on our site, although we only offer Lifetime Mortgages.

We have teamed up with Age Partnership, a leading independent specialist, so you can get guidance and compare the different options available from leading providers to be certain you choose the right plan that fully meets your needs.

Equity Release isn’t for everyone and is one of life’s big financial decisions so if you want to know more, it may be worth speaking to the experts at Age Partnership. They can search the whole of the market place for the best deal including exclusive offers available from market leaders and you will be under no obligation to proceed.

If you do decide to proceed, the team will do all the work for you, obtaining quotes and assisting with your application right through to completion.

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How does equity release work

how does equity release work

To qualify for an equity release scheme you must be at least 55 years of age, living in the UK or Northern Ireland and your home should be worth at least £60,000.

The maximum cash sum you can release is between 20% to 50% of your property value but this will depend on the value of your home, your age. 

To get you started you can either use the equity release calculator on this site or the "get a quote" button on the compare equity release deals section. 

A qualified adviser from Age Partnership will then contact you and ask a few questions to establish the right options that meet your needs. There is no obligation at any point whilst deciding on the best choices, so please do ask as many questions as you wish.

The adviser will then provide you with a written Key Facts Illustration, which will show you the amount of cash you can release with the costs involved.

You may find it useful at this stage to involve your family and discuss it with them.

All the paperwork can be arranged over the phone or an adviser from Age Partnership will visit you in person.

If you have an existing mortgage on your property don't worry, as this can be repaid with the equity released and then still give you a cash sum (subject to the maximum loan available). 

There are various schemes on offer, providing a lump cash sum payment to spend as you wish or you can have an income to top up your existing retirement income or a combination of both!.

Once you have decided on the right plan and completed the paperwork, the plan provider will arrange for your property to be valued; once the provider has completed their paperwork your solicitor will start to complete the legal side of things.

From start to finish with the money being in your bank account usually takes between 6 to 8 weeks.

You’re in Safe Hands

All equity release plans recommended by Age Partnership are fully protected and regulated by the Financial Conduct Authority and approved by the Equity Release Council.

This means that your plan will come with the following guarantees:

  • You have the right to remain in your home for life or for as long as you choose
  • You will never owe the mortgage provider more than the value of your property, even if house prices fall and interest rates increase
  • You have the flexibility to move to another property without financial penalties

All of these details will be fully explained, along with how equity release works, to you by an Age Partnership qualified adviser.

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Equity Release advice

The equity release advice you get from the team at Age Partnership, will help you compare and choose the best equity release plans to suit your personal circumstances.

They offer expert equity release advice on a range of products from leading providers, so you can be sure of getting the right deal.

Their team are fully trained and qualified to answer any questions you may have and will also arrange a no-obligation consultation in your own home if you prefer to talk things through face to face.

They will also point you in the right direction for help if you are in receipt of any state benefits, as a lifetime mortgage could affect these. 

You will not be pressured into buying or encouraged to make quick decisions; in fact they will encourage you to speak with your family before going ahead.

equity release calculator

If you do decide to take out a plan, Age Partnership charge 1.95% of the cash sum you release with a minimum fee of £1,395 only payable at completion once your plan is in place.

This charge is payable only if you proceed. If you decide not to go ahead you will not be charged.

You will also need to pay for your solicitors fees, as they will provide advice independently on the implications of releasing equity from your home and also for setting up the legal aspects of your chosen equity release scheme, so you can be sure that everything has been legally taken care of.

If you don't have a solicitor, one can be recommended to you and will typically cost £495 plus VAT and disbursements.

You can get free equity release advice without obligation by speaking with an adviser at the Age Partnership, even if it's just to find out how much you could borrow and how it all works.

Compare equity release & see how much equity you could release from your home

We have teamed up with Age Partnership, who will search the whole of the market for the best deal that matches your needs. This service is free and you are under no obligation - so why not try it and see if we can help you.

compare equity release schemes

This equity release comparison summary will enable you to compare; providers, interest rates and schemes.

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Equity Release schemes on offer

There are two types of equity release schemes available to you: the Lifetime Mortgage and the Home Reversion Plan, both of which allow you to release equity and remain living in your home.

Lifetime Mortgage

A Lifetime Mortgage works in a similar way to a normal mortgage in that it is a loan secured on your home; the difference being that you don’t have to make any monthly repayments.

The loan is usually only repaid when the last surviving plan holder dies or moves into long term care. 

Advantages of a Lifetime Mortgageequity release interest rates

You receive a tax free lump sum of money
There are no monthly repayments
You can live in your home for the rest of your life
You continue to have full ownership of your home

You benefit from any increase in the value of your property

Disadvantages of a Lifetime Mortgage

The debt will grow as interest is applied 
The interest rate charged is higher than a traditional mortgage
It will reduce the value of your estate
Early repayment charges may apply if you repay early
Your entitlement to state benefits may be affected

The Age Partnership advisers will of course go through this with you in more detail and answer any questions you may have about the Lifetime Mortgage Plan.

Home Reversion Plan

Home reversion plans are not loans and therefore work differently to a Lifetime Mortgage. With a Home Reversion Plan, you agree to sell all or part of your home in return for a lump sum of money.

As a result there is 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 still own.

It’s worth keeping in mind that home reversion companies are more likely to offer you less than the actual property value as they are taking on the risk of unknown future property prices. As a result their initial calculations are usually based on a property price that is lower than the market value.

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

Advantages of a Reversion Plan

You receive a tax free lump sum
You can guarantee an inheritance for your children by selling only a part of the property’s value
There is no interest to pay
You will benefit from any property value increases on the share of property you have retained 
You can live in your home for the rest of your life
You can usually release higher amounts of cash than a Lifetime Mortgage

Disadvantages of a Reversion Plan

The reversion company will own a share or all of your home
It will reduce the value of your estate
The loan cannot be repaid as you are selling part or all of your home
Your entitlement to state benefits may be affected

Over 90% of equity release schemes chosen in the UK are Lifetime Mortgages, probably because as a nation we are more familiar with the concept of a mortgage and prefer to retain full ownership.

To see how much equity you could release from your property, please give us a few details and a member of the Age Partnership team will contact you for a free, no obligation chat about how it all works and which plan will suit your circumstances.

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equity release calculator

Equity Release calculator

The equity release calculator works out how much money you could potentially release based on the value of your property and your age.

The older you are the more money you may be able to release from your home, for couples equity release plans are based on the age of the youngest person. 

The calculator is quick and easy to use and without any obligation.

The experts at Age Partnership will guide you through the process which includes:

  • Discussing your circumstances and answering any questions
  • Confirming your eligibility
  • Advising how much you could borrow
  • Arranging an appointment with an adviser to run through your options

Your adviser will then generate a personalised equity release quote and make recommendations so you can agree whether equity release is right for you. You will be under no pressure to proceed and no obligation to commit to anything.

If you do decide to go ahead, the adviser will help you complete the application form, then once the equity release provider has received your application, they will arrange for a valuation of your property. They will then make you the formal offer and once all the paperwork is complete, release your funds.

You can use the equity release calculator as many time as you wish.

Next Steps

Use the calculator & then see How it Works section

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Your equity release questions answered

Is equity release safe?

Equity release schemes are regulated by the Financial Conduct Authority (FCA) and all providers recommended by our partner, Age Partnership, are members of the Equity Release Council, the industry body with strict guidelines. The main one being that you will never owe more than you originally borrowed and that you will have a home for life.

Will I still own my own home?

Yes, ownership of the property remains with you and you can live in the property for the rest of your life.

Will my state benefits be affected?

Releasing equity from your home could impact your state benefits. The Equity Release Supermarket adviser will be able to point you in the right direction in order to establish this.

How much equity can I release from my home?

This will depend on the value of your property and your age; for a quick guide you can use the equity release calculator.

Can I move home in the future?

Yes, taking out a lifetime mortgage does not restrict and you can move home subject to the equity release providers scheme rules.

How much does it cost to arrange an equity release mortgage?

Getting quotes, using the calculator and speaking to an adviser will not cost you anything.

There is no charge for phone calls or home visits.

The only charges you pay for are when you proceed and complete the agreement and the money is in your bank account. Age Partnership will then charge you £895 which your solicitor will advise you on and is usually taken from the cash sum upon completion.

Will my family be left with my debts?

No, when the property is sold your outstanding balance will be repaid to the equity release provider and any surplus paid to your family/estate. In the event that you owe more than the property is worth, your family will not be asked for any money, as all plans come with a no negative equity guarantee.

What happens if I have to go into care?

Should this happen and you have a partner/spouse living in the property then the will continue to do so. If you live alone and are unlikely to return then the property will be sold and the provider repaid and the balance returned to you; your family will be consulted at all times.

Which equity release providers do you recommend?

Our partner, Age Partnership, work with the following leading providers:

  • Legal & General
  • Retirement Advantage
  • Just Retirement
  • Hodge Lifetime
  • Crown Equity Release
  • Aviva
  • Marsden Building Society

They will review the whole market and providers on your behalf

Can I apply if I still have a mortgage outstanding on the property?

Yes, although this will need to be repaid from the new equity release mortgage. Our advisers can advise you on this.

How long will it take to apply?

Applying is simple and your adviser will help you with this once you have decided to proceed.

Once you have applied it typically takes around 6 to 8 weeks to get all the legal paperwork and mortgage in place.

I'm not sure what to do or where to start!

Don't worry, you are not alone!

Releasing equity from your home can seem quite daunting, but our equity release specialists are here to help. they will not talk financial jargon at you, but they will hold you hand all the way through the process, answering your questions and any concerns.

To start, why not use the equity release calculator to see how much you could borrow, if you're not sure of your property value just take a guess, it doesn't matter as we can help you with this.

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Equity Release Reviews

  • Our reviews show you the award winning equity release providers
  • Highlights unique features and things to look out for
  • Helps you compare equity release schemes

About the Over50choices Equity Release Review

Whether it is to help fund retirement costs, pay for home improvements or fund that trip of a lifetime, these days an increasing number of people are looking at equity release schemes as part of their financial planning. But with so many options available, we thought it would be helpful to provide equity release reviews on the main lenders in the market, so you can understand more about what is available to you.

Of course once you have read your equity release reviews, if you choose to go ahead with an equity release scheme, it is important that you fully understand the implications of a lifetime mortgage; look at all the options available to you and discuss everything with the family.

You also need to seek advice from an equity release qualified financial adviser. It may be worth speaking to one that can compare the whole of the market, like Age Partnership rather than a single equity release provider, but we will focus more on this a little later in the review.

What you can expect from your equity release review

As mentioned our reviews focus on the UKs leading equity release providers which includes Aviva, Legal & General, LV, Pure, One Family, Retirement Advantage, Hodge Lifetime, Just Retirement and Bridgewater Equity Release.

Each equity release review will focus on an individual provider, beginning with background, information on the company; the range of products they offer and any awards they have won.

Equity Release options

The reviews will then concentrate on the equity release options or more specifically the lifetime mortgage plans that the company in question offers.

The majority of equity release providers offer two types of plan:

  • A lump sum lifetime mortgage
  • A flexible lifetime mortgage

With both types of lifetime mortgage there are no monthly repayments as the loan is repaid once the property is sold, and you get to stay in your home either until you (and your partner if it is a joint equity release scheme) die or go into residential care.

Generally speaking a lump sum lifetime mortgage provides a cash lump sum in one go that can be used as you wish. The amount available will depend on your age and the value of your property.

A flexible lifetime mortgage plan gives you the chance to take out an initial loan, but also have a further amount of money available to you that you can draw against in the future. As you only pay interest on the amount of money you have borrowed and not the money reserved for future borrowing, this may be a more suitable option for some.

We will also include in the equity release review confirmation of the all important ‘No Negative Equity Guarantee’ which all providers should have if they are members of the Equity Release Council. This guarantee ensures that the amount repayable will never be greater than the amount your property is sold for.

In addition we highlight any rules around voluntary repayment of the loan and inheritance protection guarantees that mean part of the value of your property can be left to family.

Are you eligible for Equity Release?

Although the criteria may vary slightly from company to company, you are eligible for most equity release schemes if the following applies:

  • The youngest applicant is a homeowner aged 55 or older
  • You are mortgage free or have a small mortgage (any existing mortgage will need to be paid off from the money you release from your property)
  • Your property is freehold, based is in the UK, is your main residence and worth at least £75,000
  • You want to borrow a minimum of £10,000 - 15,000

There are exceptions to these rules such as leasehold property’s may be accepted depending on the time remaining on the lease, so if you are considering equity release but unsure whether you are eligible, speak to a qualified financial adviser.

Review of additional information on Equity Release Schemes

This section of the equity release review will focus on any other information we believe you should know about a particular providers lifetime mortgage plans.

This will include any criteria for remaining in your property; how the interest is applied to the lifetime mortgage, whether you can move once your lifetime mortgage is in place and any further information on early repayment of your plan.

Equity Release Calculator

Some equity release providers have a quick and easy to use equity release calculator on their websites which provide a rough indication on the amount of money you can borrow.

By adding your age and value of your property, the calculator shows how much money you could release but for a more accurate figure, you would need to speak to a financial adviser.

Compare Equity Release Schemes

When you are ready to compare equity release schemes you can either contact the specific lifetime mortgage provider directly (although some companies insist you come through a financial advisor) or speak to your own IFA.

It is important to note that some financial advisers, especially the ones that are recommended by equity release providers, may just be able to offer advice on a specific scheme as opposed to reviewing and comparing a range of companies.  

This is why we have teamed up with Age Partnership, a leading independent specialist that reviews and compares equity release schemes with the whole of the market, including companies like Aviva, Legal & General, LV, Pure, One Family, Retirement Advantage, Hodge Lifetime, Just Retirement and Bridgewater Equity Release.

For more information or to try their Equity Release Calculator, please click here..

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