How to release the equity in your property

4th October 2023

You are retired, or nearing retirement.

You have dreams.

You want to travel the world, renovate your home, buy a new car, or pay off your mortgage.

You just don’t have the funds to do it – or maybe you do?

How much can you release?

If you are aged 55 and over, and a UK homeowner with a minimum value of £70, 000, you could potentially access a proportion of the value of your property as tax-free cash lump sum, and remain living in the home you love.

The amount you can release depends on several factors:
In many cases, you maybe able to release between 20% - 60% of the value of your property, but everyone’s circumstances are different.

  • Your age
  • Health
  • Value of your property
  • Suitability of your property for a release of equity
  • The amount of equity you have in your property
  • Your affordability

What factors affect the amount of equity release?

There are 2 main factors considered by the equity release lender:

1. The value and suitability of your property

The lender will arrange for a valuation for your home to assess it’s current market value and take into account its construction type, position, general state of repair, any debts held against the property, and other factors (for example and not limited to) if it is a listed building, if it is a freehold or leasehold property, it’s proximity to any commercial properties and is it subject to a potential risk of flooding.

2. Your age and health

The equity release lender will consider how long you may live depending on your age, current health, previous medical conditions and other lifestyle factors. For joint applications, this will mainly look at these factors for the youngest applicant.

Essentially, the lender wants to know that there is enough equity in your property to be able to finance the loan, and for how long you are likely to need the loan.

Do you have to pay back the equity release loan?

Like a conventional mortgage, you have choices in how you pay back the loan to the lender; you may choose to make regular monthly or annual payments of interest or interest and capital. Unlike a conventional mortgage however, instead you may choose not to make regular repayments but prefer to make occasional or varied ad hoc payments. Alternatively, you may choose to allow the capital and accrued interest to roll up and compound over time and never pay a penny for the lifetime of the loan.

However, whatever method you choose, the full value of the existing loan plus the accrued interest needs to be paid back to the lender when you die or enter into long term care (or, in the case of a joint application, when the last of you dies or enters into long term care). For those wishing to move house and have an equity release loan, there may be the option to port the loan to the new property accordingly. If this cannot be done, then the loan plus accrued interest must be repaid. Early Repayment Charges may also apply.

What’s involved in equity release?

It is essential that you seek the advice of an experienced, qualified equity release specialist before considering any action as they will tell you if equity release is the best option for you.

If you decide to go ahead, you will need to find an equity release solicitor – many advisors can direct you towards a reputable firm - and then you will be contacted by the lender to arrange a valuation of your property. If the lender is happy with this valuation then they will make you an Offer Of A Lifetime Mortgage.

The equity release solicitor, your equity release advisor and the lender will communicate and liaise with you as necessary to ensure that the process runs as smoothly as possible to enable the completion of your application and the release of your funds.

Would you consider releasing equity from your property?

So, that’s how it works in simple terms. If you would like to have a casual chat to discover your options, leave a comment on our website or Facebook page and we will be happy to help you.

Time to live out your retirement dreams? – why not!


How to release the equity in your home | The Independent | The Independent

Why not get in touch and see how we can help?

Equity release could be the answer to some of your financial questions. If you would like to know more about it, and see if it could be the right option for you, please book an appointment or request a call-back

Providers include

Pure Retirement

Equity release will reduce the value of your estate and may also affect your entitlement to means-tested benefits. You should always think carefully before securing a loan against your home.

Unless you decide to go ahead with a plan, our service is completely free of charge, as our fixed advice fee of £1,695 is only payable on completion of a plan.

A lifetime mortgage is the most popular form of equity release, and is a loan secured against your home that’s typically repaid when you pass away or go into long-term care.