Can I release equity from my house?

Before you can take out equity release or lifetime mortgage, you must meet certain criteria. You (or both of you, if you’re borrowing jointly) must be at least 55 years old to qualify for a lifetime mortgage. You (or both of you, if you’re taking out a mortgage jointly) must be at least 65 years old to qualify for a home reversion plan.

What is Equity Release?

The sum of capital you own in your home is referred to as equity. For instance, if your house is worth £300,000 and you owe £200,000 on a mortgage, then you have £100,000 in equity.

Equity release is a way to get money out of your house without having to sell it, but it comes with some risks. Equity release is a major decision; you should think about it carefully and seek professional independent financial and legal advice before proceeding. You may also wish to discuss this with close family i.e. children as this will affect your family also.

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What types of equity release plans are there?

There are two main types of equity release:

  • Lifetime mortgage. This is the most common type of equity release. You take out a mortgage on your home until you or the second person goes into long term residential care or passes away. The mortgage is normally repaid by the sale of your house.
  • Home reversion plan. You raise funds by selling all or part of your home while continuing to live there until you die or move into long-term care.

Who can get equity release?

Before you can take out equity release, you must meet certain requirements:

  • You (or both of you, if you’re borrowing jointly) must be at least 55 years old to qualify for a lifetime mortgage.
  • You (or both of you, if you’re taking out a mortgage jointly) must be at least 65 years old to qualify for a home reversion plan.
  • You must own property in the United Kingdom that serves as your primary residence.
  • Your property must be in good condition and have a certain value, and the type of property approved may be restricted.
  • You will also be eligible for equity release if you have a mortgage or secured loan on your home, but it will depend on the value of your home and the amount owed on the current mortgage or loan. At the same time as taking equity release, you’ll have to pay off any mortgages or loans secured against your house.
  • If you have dependants living with you, equity release may not be the best option. Any dependents should seek independent legal advice separately. If they want to stay in the house with you, they will have to sign a waiver acknowledging that they don’t have the right to live there if you die or go into permanent residential care.

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Finding an adviser

Before taking out an equity sale, always seek advice from a specialist equity release advisor. Our advisors, who have extensive knowledge of the mortgage industry, take the time to get to know you, your financial situation, and your life goals.

From a residential remortgage to a buy-to-let mortgage, from a first-time buyer mortgage to a retirement or equity release mortgage, we have over 30 years of collective experience in working with all forms of mortgages.

What are the advantages and disadvantages of equity release?

It’s difficult to grasp the benefits and drawbacks of equity unlock. We’ve summarised some of the benefits and drawbacks of both forms of equity release below, but you should seek more details.

Seek advice from our equity release specialists who are qualified and thoroughly trained and experienced. They’ll look into your personal situation and see if there are any other options. If equity release is the best choice for you, they will recommend the kind that best meets your needs.


  • You can receive a tax-free lump sum and/or smaller, monthly payments to supplement your salary, and you can stay in your home until you die or are placed in permanent residential care.
  • Any increase in the value of your home can continue to benefit you.
  • Since equity release is transferable, you can still downsize to a suitable alternative property in the future. It will be contingent on your new home meeting the current property suitability requirements.
  • You will be able to live in and own your home with a lifetime mortgage.
  • Equity release lowers the amount of Inheritance Tax Liability your family may have to pay if there is a lifetime mortgage on it and if your estate is valued at more than the minimum Inheritance Tax threshold. Anything you own, including assets, land, belongings, and investments, is considered part of your estate.


  • Equity release lowers the value of your estate and the amount that will go to the individuals you appoint in your will as beneficiaries. Anything you own, including assets, land, belongings, and investments, is considered part of your estate.
  • With a Home Reversion Plan provider company owns all or a portion of your home under a home reversion contract.
  • Taking a lump sum or extra cash to supplement your income now or in the future can reduce your eligibility for means-tested benefits.
  • If you receive home care that is paid for entirely or partly by the local government, they will begin to charge you or ask you to pay more.

How does equity release affect benefits?

Any benefits you receive can be affected by equity release, as well as any benefits you may be entitled to in the future.

Any means-tested benefits you receive can be reduced or eliminated altogether. Benefits that are means-tested include:

  • Pension Credit
  • Jobseeker’s Allowance
  • Income Support
  • income-related Employment and Support Allowance
  • Universal Credit
  • Council Tax Support

A specialist equity release adviser will advise what will happen to your benefits if you take out a plan.

How can I avoid risk if I’m taking out equity release?

The Financial Conduct Authority regulates all firms that advise on or sell equity release (FCA).. All advisers who are regulated by the FCA have protection for you such as the Financial Services Compensation Scheme and the Financial Ombudsman Service

A product from a company that is a member of the Equity Release Council is the best option. This is an industry organisation whose members agree to follow a voluntary code of ethics. Mortgage Saving Experts have voluntarily signed up to these codes of ethics. Certain product standards are included in this. When these criteria are met, you should expect to:

  • live in your property for life, or until you move into permanent residential care
  • move your plan to an alternative property (providing it is acceptable to the equity release product provider)
  • never owe more than the value of your home when it is sold after you die or move into permanent residential care i.e., you will never be in negative equity.

Always seek a specialist equity release advisor, and make sure that both the adviser and the equity release provider are FCA-approved. All Equity release advisers in Mortgage saving Experts are regulated by the FCA and are members of the equity release Council.

Things to consider before Releasing Equity

Equity – what you should look at

Estimate the value of your home against the balance of your unpaid mortgage as a starting point. If you decide to go ahead with equity release or a remortgage, the lender will do their own due diligence with a panel surveyor to determine how much your home is worth in today’s market.

Websites like Zoopla or Rightmove will generally provide you with an estimation of how much your home is worth. However, these aren’t always correct, so check to see if any similar properties in your area have recently sold.

The cost of Equity Release

Calculate a monthly number that is manageable for you by looking at your existing mortgage repayments and other outgoing expenses.

Be mindful of any withdrawal penalties associated with your current mortgage; you can be charged an early repayment penalty if you leave your current lender, and this fee may be substantial. We can do this for you if you are unsure.

Equity release on leasehold properties

Even if your property is leasehold, you can always consider releasing equity from it. However, each mortgage provider will have their own set of criteria for what is and isn’t suitable in terms of lease term duration. They normally look for a 75-year remaining period on your current lease, but this does vary from lender to lender.

At Mortgage Saving Experts, we provide a FREE no-obligation consultation where we look at your personal circumstances and consider the best options for you. Contact one of our experienced mortgage or equity release advisers who will be happy to help.

Want to know more?

Get in touch with of our mortgage saving experts today.

How to access your equity

There are a few options open to you if you have equity in your home that you want to release. To begin, you could sell your home. This will include paying off any outstanding mortgages on the house. The difference between the sale price and the mortgage balance, will be yours (less any solicitor costs or other fees you might incur).

Second, you may ‘remortgage’ your home to free up equity. This procedure entails borrowing more money from a bank or lender than your current mortgage balance. For example, if the value of your home has increased by £75,000 and you want to spend £40,000 of it, you can apply to add £40,000 to your existing mortgage or apply to a different lender – this is known as Remortgaging. There are lots of criteria around this also so best speak with one of our experts to see if this is possible. They will then look at how much you earn and what debts you have to see if it is affordable for you.

There are also lenders who would consider lending to you via a “second charge” or “secured loan”. They’ll register a charge against your property so when the property is sold the lender is repaid first, then the second charge or secured loan company get their money next and anything that is left over goes to you. Their rates are typically higher than those offered by your primary mortgage lender, but they may be able to assist you in situations where your primary lender is unable to.

The procedure of applying for a mortgage to release equity from your home is identical to any other mortgage application. This will be determined by the equity-to-mortgage ratio (also known as the loan-to-value – LTV), as well as your monthly income and expenses. The amount of risk involved in lending to you would be similar to most lenders. The application process will determine the loan’s affordability.

How long does a remortgage take?

If you choose to remortgage, it normally takes between four and eight weeks, depending on the difficulty of your application.

If you want your new mortgage contract to start when your current one ends, you can submit an application a few months before your current rate expires.

Completion is normally delayed until your current rate expires, particularly if there are any early payment charges. When it comes to this, our knowledgeable advisors will confirm the best course of action.

Releasing equity to buy another property

You may be trying to cash out some of your equity to buy a new home. This may be for an investment in a holiday home or as a place to spend a portion of the year. In any case, there are some important factors to consider, such as stamp duty (there have been adjustments that mean a second home or investment property would typically incur an extra 3% stamp duty) and the various mortgage options available. If you’re thinking about buying a second home abroad, do your homework first because there are a variety of taxes and regulations to remember.

Call our expert mortgage advisers today

Whether you are looking to borrow more money from your existing mortgage provider, or you would like to remortgage to release equity with a new bank or mortgage lender, Mortgage Saving Experts can help. We provide a FREE no-obligation consultation where we look at your personal circumstances and consider the best options for you. Give us a call on 01273 738 072, and one of our friendly, impartial, and experienced mortgage brokers will be happy to help.


Can equity release be transferred?

It is feasible to relocate after obtaining equity release. Some equity release products (both lifetime mortgages and home reversion plans) allow you to transfer your debt from one property to another. There will be some important restrictions on the types of property and their values that the equity release provider will accept. Before making any decisions, you should consult with your equity release provider.

What happens if I pass away soon after taking equity release?

Your beneficiaries will be obligated to repay the equity release loan if your equity release product has completed and you have received the cash and merely applied for it in your own name. If you have a lifetime mortgage, most lenders will give your beneficiaries up to 12 months to repay the amount. Interest will continue to accrue throughout this time. If any money from the equity release payment are left over, they can be utilised to lower the overall debt. If you took out a lifetime mortgage with a spouse who survives you, you wouldn’t have to pay it back until they died or went into long-term care.

Would my partner have to move when I pass away?

If you are married, in a civil partnership, or have a partner, and you both took equity release, your spouse can live in your home after you die.

Can equity be repaid before I pass away?

There are lifetime mortgages available that allow you to repay the amount borrowed plus interest. You have the option of paying back a portion or all of the total amount. Home reversion plans allow you to repurchase the portion of the property you sold, but at full market value. This means you’ll have to pay the equity release company more money than you got for the stock. If you are able or desire to decrease the impact of interest being charged to your loan, you may want to explore a retirement interest only mortgage, which typically has lower interest rates.

Does cash I release from my home get taxed?

The lump sum of cash you receive from your home is tax-free. If you elect to put this money in a savings account, obtain a regular income through an annuity, or invest it, you may owe tax on any interest, income, or gains you earn. In most cases, an adviser would not encourage you to put money from a lifetime mortgage into a savings account. This is because the interest you earn on your savings will be less than the interest you pay on your mortgage over the course of your life. Furthermore, the interest charged on a lifetime mortgage will compound, meaning that not only will interest be accrued on the amount borrowed, but it will also be compounded with future interest. Over time your debt increases.

Can I move home if I want to?

Some equity release items can be moved from one home to the next. This covers home reversion programmes and lifelong mortgages. Your new home must meet certain standards set forth by the equity release provider, such as the location, condition, and value of the property.

Can I do what I want with the money?

It is totally up to you how you use the money you receive through equity release. You may use the extra money to pay off any outstanding mortgages or other bills, assist family members in getting on the housing ladder or purchasing a larger property, make home modifications, or go on a vacation. You should keep in mind that a lifetime mortgage may end up costing you more in the long run, so think about it before merging any previous loans.

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Want to know more?

For more details, call our Mortgage Saving Experts today.

Want to know more?

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