What Equity Release Looks Like in Practice

Equity release isn’t just a technical financial product — it’s something people across the UK use every day to gain flexibility, security, or peace of mind in later life. And while the idea of unlocking value from your home may sound simple, how people actually use that money can vary hugely.

In this guide, we’ll walk you through six realistic examples of how homeowners aged 55+ have used equity release to meet very different needs. Each scenario includes real-life financial figures to give you a clearer idea of what’s possible — and whether equity release could be right for you.

Equity release allows homeowners over 55 to unlock tax-free cash tied up in their home, without having to move out. The most common form is a lifetime mortgage, where the loan (plus interest) is usually repaid from the eventual sale of the home when you pass away or move into long-term care.

There are no required monthly repayments with standard plans, although some allow you to pay interest if you want to reduce the final balance. The other main type is a home reversion plan, where you sell part or all of your property to a provider in return for cash — but this is far less common today.

Let’s take a look at how equity release is actually being used in real life.

Paul and Janet, aged 67 and 69, live in a detached house in Derbyshire worth £285,000. They still owe £38,000 on an old interest-only mortgage, and the monthly payments are putting pressure on their pension income. They also dream of updating their dark, outdated kitchen into something more modern and open.

After speaking with an equity release adviser, they decide to release £65,000 using a lump sum lifetime mortgage. This gives them enough to:

• Pay off their outstanding mortgage (£38,000)
• Fund a full kitchen renovation and minor home upgrades (£25,000)
• Cover legal and setup fees and keep a small emergency buffer (£2,000)

Now mortgage-free and with a more functional home, Paul and Janet say the release has given them not just space, but breathing room.

Shirley, 73, lives alone in a mortgage-free property in Kent valued at £310,000. Her daughter and son-in-law are both in their early 30s and desperate to buy a home, but despite saving hard, they’re falling short of a deposit.

Shirley decides to release £50,000 via a lump sum lifetime mortgage to gift to her daughter. Everyone agrees this will reduce the inheritance her daughter eventually receives — but they all feel the benefit of home ownership now far outweighs that.

The money is used as a 10% deposit on a two-bedroom home, and Shirley is happy knowing her equity has helped her daughter put down roots without sacrificing her own home or lifestyle.

Richard and Anne are 70 and 68, retired and living in a mortgage-free property in Yorkshire worth £270,000. Their combined income from the State Pension leaves little room for holidays or rising household costs.

They choose a drawdown lifetime mortgage. An initial £20,000 release covers urgent repairs and gives them enough for a long-awaited cruise holiday. The remaining £60,000 is kept in reserve, ready to access later for future needs.

Because they only pay interest on the money they’ve withdrawn, this setup reduces the total cost over time. They appreciate having a flexible pot they can dip into without adding immediate interest charges.

Marion, 75, has lived in the same Northumberland bungalow for nearly 50 years. She has no mortgage, but limited savings and a growing list of essential home improvements — including a leaking roof, slippery garden paths, and an outdated bathroom.

With her home valued at £240,000, she uses a drawdown plan to release an initial £15,000 to fix the roof and make the garden safer. She also sets aside an additional £45,000 for future renovations.

This approach means she can improve her home gradually, as and when needed, while only accruing interest on the money actually withdrawn. It also allows her to remain in the home she loves, safely and comfortably.

Ron and Lesley, both aged 72, live in a mortgage-free property worth £320,000. They love caravanning holidays around the UK, but their current car is becoming unreliable, and the caravan is dated and uncomfortable.

With no savings left for replacements, they consider equity release. They borrow £40,000 using an interest-only lifetime mortgage, enough to buy a reliable hybrid car and a modern two-berth caravan.

They decide to make monthly interest payments of around £130, which keeps the loan balance steady — preserving the full amount of their remaining property equity for their children

Tom, 63, owns a semi-detached home in Lancashire worth £250,000. After having to leave work due to health problems, he’s taken on part-time work, but he’s still struggling with old business debts totalling around £30,000.

After reviewing his options, Tom chooses to release £35,000 through an interest-only lifetime mortgage. This lets him clear all his unsecured debts and pay off credit cards — without risking bankruptcy.

He can comfortably manage the £110 monthly interest payments for now, and is reassured that if his income changes, the plan can switch to rolled-up interest. It gives him back control without putting his home at risk.

All regulated equity release advisers and lenders must follow rules set by the Financial Conduct Authority (FCA). If your provider is also a member of the Equity Release Council, you’ll benefit from further guarantees:

• No negative equity guarantee – you’ll never owe more than your home’s value
• The right to remain in your home for life
• Freedom to move, with your plan transferred if the new property qualifies
• Option to make penalty-free partial repayments
• Interest rates that are fixed for life or capped at a maximum

These protections are designed to give you confidence and peace of mind at every step.

While equity release can be a powerful financial tool, it’s important to be aware of the risks:

• It reduces the value of your estate, which may affect what you leave behind
• Interest compounds over time unless you make repayments
• It may impact means-tested benefits or local authority care support
• Early repayment charges may apply if you pay back the loan ahead of schedule
• If you gift money, it could have inheritance tax implications in future

That’s why it’s essential to speak to a specialist adviser who will walk you through not just what equity release can offer — but also what it might mean for your long-term plans.

Equity release isn’t a decision to rush. But if you’re over 55 and own your home, it could offer you the freedom to use your property wealth without moving — and without monthly repayments if you don’t want them.

Whether it’s clearing a mortgage, helping family, or improving your lifestyle, the right advice makes all the difference. A specialist can help you explore your options, compare plans from leading UK providers, and check for any alternatives that might be more cost-effective.

Start by using a free calculator to see how much you could release, or speak to an adviser to get tailored, regulated guidance.

Equity release can be helpful, but it’s not the best fit for everyone. If the amount you’re able to release falls short of what you need, there are other routes worth exploring:

• Downsizing – Selling your home and moving somewhere smaller could free up the extra funds you’re looking for.

• Retirement Interest-Only (RIO) Mortgage – This lets you borrow against your home while only paying the interest, so your debt doesn’t grow over time.

• Pension Annuity – If a steady income is what you’re after, an annuity could be an alternative. It turns your pension savings into a guaranteed income for life.

Not sure which option is right for you? A qualified adviser can talk you through the pros and cons of each, helping you find the approach that fits your plans and priorities.