What Is Equity Release?

If you’re aged 55 or over and own your home, there’s a way to access some of the money tied up in your property — without selling up, downsizing, or making monthly repayments. It’s called equity release, and it’s helping thousands of homeowners turn bricks and mortar into tax-free cash.

Whether you’re looking to boost your retirement income, clear debts, help family, or enjoy life a little more, equity release offers a way to access the wealth you’ve built up — on your terms.

Put simply, equity release allows you to borrow money against the value of your home or, in some cases, sell part of it — all while staying exactly where you are. It’s available to homeowners over 55, and you can typically choose between taking a lump sum upfront, drawing money as and when you need it, or a combination of both.

Importantly, there are no required monthly repayments. Instead, the loan is usually repaid later — when you pass away or move into long-term care.

And if you still have a mortgage? That’s okay — equity release can be used to pay it off.

There are two main types of equity release. Each works a little differently, but both are designed to help you stay in your home for life.

Lifetime Mortgages

This is the most popular option — and it works much like a loan secured against your home. You keep full ownership, and there are no monthly repayments required. The loan, plus any interest, is paid off from the sale of your property when the plan ends.

You can:

• Take the cash as a lump sum or draw it in stages
• Choose to make interest payments (optional)
• Protect a portion of your property’s value for inheritance
• Access enhanced plans if you have certain health conditions or lifestyle factors (these may unlock more money or lower rates)

With lifetime mortgages, flexibility is built in — so your plan can be tailored to suit your needs.

Home Reversion Plans

A home reversion plan works differently — you sell all or part of your home to a provider in return for a tax-free lump sum, regular income, or both. You stay in the property rent-free for the rest of your life, but you no longer fully own it.

These plans are only available from age 60 or over, and because you’re giving up part of your ownership, the percentage of your home that’s left will go to your family when the property is sold.

Home reversion is less common, but for some people, it offers the right mix of simplicity and certainty.

Eligibility depends on a few core factors. Generally speaking:

• For lifetime mortgages, you’ll need to be at least 55 years old
• For home reversion plans, the minimum age is typically 60+
• You must own a property in the UK, usually worth £70,000 or more (or £100,000 for home reversion)
• If applying jointly, eligibility is based on the youngest homeowner on the deeds

Every provider has their own criteria — but a qualified adviser can help assess your options quickly.

It varies from person to person. How much you can unlock depends on your:

• Age (the older you are, the more you can borrow)
• Property value
• Equity in your home
• Location
• Health and lifestyle (for enhanced plans)

Most lenders allow you to borrow between 25% and 60% of your home’s value. There’s usually a minimum release amount, often around £10,000.

To give you an idea: according to industry figures, the average drawdown customer released around £115,243 in 2024

Yes. Most lifetime mortgages are designed to be portable, meaning you can move home and take your plan with you — as long as the new property meets the lender’s criteria.

If you downsize, you may need to repay part of the loan (and potentially face a charge), but your adviser will explain how this works. The key takeaway is that equity release doesn’t stop you from moving in future — you just need the right support to navigate the options.

That’s entirely up to you. Once any existing mortgage is cleared, the money is yours to spend however you wish. Many people use it to:

• Top up retirement income
• Clear outstanding debts or mortgages
• Help children or grandchildren financially
• Make home improvements
• Enjoy holidays, hobbies, or simply peace of mind

There are no restrictions on how you use the cash — it’s your equity, and it’s there to support your goals.

Equity release isn’t for everyone — but for many over-55s, it’s a powerful financial tool that provides freedom, flexibility, and financial breathing room without having to give up their home.

With so many plans available today — and modern protections in place from the Financial Conduct Authority and the Equity Release Council — it’s never been safer to explore your options.

Your first step? Speak to a qualified equity release adviser. They’ll explain how it all works, look at what you could unlock, and help you decide whether equity release fits into your future plans.