Am I eligible for equity release?

The main eligibility criteria for equity release is quite straightforward in terms of age, property location and value. However, when reviewing your application, there are other aspects your lender will take into consideration that may impact your ability to qualify.

To help you understand if releasing equity is right for you, we take a closer look at the equity release criteria and explain what lenders expect when assessing your suitability.

Equity release criteria – who is eligible?

The main eligibility criteria for an equity release lifetime mortgage is as follows:

  1. You or the youngest homeowner must be at least 55 years of age
  2. You should own a property located in the UK
  3. Your property must be worth at least £70,000

Alternatively, to qualify for a home reversion plan which is the other type of equity release, you must be at least 60 years of age.

In addition to these 3 main requirements, the type of property you own will also be taken into consideration to ensure it meets with the companies’ lending criteria.

How your age can affect your eligibility for equity release

One of the main deciding factors for qualifying for equity release is your age. As the loan is repaid when you die or move into care, the lender is taking a greater risk with younger applicants, as they expect it to take longer for the loan to be repaid. Therefore the older you are, the more you can borrow.

To illustrate how age can impact the amount of equity you can release, here as some examples by age and property value.

Your age
Examples of equity release - lifetime 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

£101,000

£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.  

It’s also worth mentioning that whilst some lenders impose an upper age limit of 90, others have no upper age limit at all.

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How your property can affect your ability to qualify for equity release

As the loan you are taking out against your home is repaid from the sale of your property when you die or move into long-term care, your lender will want to ensure your property is saleable. Therefore, in addition to the main qualifying conditions, your home will also need to comply with the following requirements.

Property type and construction

Most standard construction properties i.e. brick, stone, tiled or slate roofed houses, flats and bungalows) are acceptable for equity release. 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.

In addition, some lenders may be more cautious over lease hold properties, especially where the length of the remaining lease is short.

Property condition

To qualify for equity release your property must be in a good condition and kept in a good state of repair throughout the duration of the lifetime mortgage. As part of the application process, a surveyor will visit your property to assess its value and suitability for equity release.

Property location

Equity release is available in mainland England, Wales, Scotland and Ireland although there are fewer lenders available in the latter. Some islands like the Isle of White also qualify however others such as the Isle of Man don’t.

In addition to location within the UK impacting your ability to qualify for equity release, so may the location of your property within the local area. Anything that could affect the resale of your property could also have a bearing on your eligibility. For example:

  • Rural or remote areas – that may be less attractive to new home owners.
  • High risk areas – that are prone to floods or landslides.
  • Local market conditions – where property prices are stagnant or declining or where there is low demand for housing.
  • Neighbouring properties – that may not be attractive to new buyers such as a pub, busy restaurant or train station.

What else can affect your eligibility for equity release?

In addition to the main eligibility criteria, your application for equity release may also be affected by the following:

An existing mortgage – You can release equity if you have an existing mortgage in place but it will depend on the size of the debt. Also, the loan will need to be repaid with the money you release.

The amount you want to release – This may be a problem if you have a set figure in mind but the actual amount you can release is less because of your age or the value of your property. To understand how much cash you could get, use our free calculator.

Health – If you are in poor health, it could impact your ability to release equity in a positive way. If the lender believes your medical condition could lead to a shorter life span, they may offer you a larger percentage of your equity as there is a greater chance of the loan being repaid sooner.

Credit history – your credit history typically will not affect your eligibility as you do not have to demonstrate you have the funds to make monthly repayments. However, you may not be accepted if you have been made bankrupt.

Is it difficult to get equity release?

As long as you are the right age and have a property that meets the company’s lending criteria, it is not difficult to release equity. As the loan is repaid from the sale of your property, you don’t have to demonstrate affordability as you do with other types of residential mortgages.

The process typically takes around 8 weeks but this will depend on your personal circumstances.

Next steps

Equity release is a big decision, so it's important to be certain it's right for you.

We work in association with leading equity release specialists Age Partnership who will be happy to answer your questions and provide you with more information. Their initial advice is completely free of charge and there is absolutely no obligation to proceed.

You can request a call back or call 0800 133 7656 for an immediate discussion. Alternatively, use the calculator to find out how much cash you could release from your property.

 

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