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How to release equity from your home

Equity release can be used to boost your retirement income by unlocking cash tied up in your home.

In this article we consider what releasing equity involves, and the key steps in the process.

First of all, what is equity?

In its simplest terms, house equity is the value of the proportion of your home that you own.

So, the amount your home is worth minus any mortgage.

If the outstanding balance of your mortgage is £250,000 and the value of your property is £300,000, for example, then you have £50,000 equity in the property. If your mortgage has been paid off completely, then you will have 100% equity.

To put it another way:

Equity = the deposit you paid when you bought your house + the amount you've already paid off your mortgage + any increase in the value of your home

How to release equity from your home

There are two types of equity release products: lifetime mortgages and home reversion plans.

Most people choose to use a lifetime mortgages to release equity so this article looks at these specifically. A lifetime mortgage is a loan that is repaid when you die or enter long term care.

It's a complex product and can only be taken out through a professional, regulated adviser. The process of getting one can be broken down into seven key stages:

Speaking to a financial adviser

They will need to be a specialist in equity release, like the OneFamily Advice team.

Fact finding and providing recommendations

After speaking to you and agreeing next steps, your adviser will research the right product for you and let you know what they recommend.

Applying

If you're happy to go ahead, your adviser will complete the application on your behalf and send it to your chosen provider. Please note, providers can't accept an application that comes directly from you, an adviser has to apply on your behalf.

Valuating

The provider will send someone out to value your property.

Receiving a mortgage offer

All being well, your provider will send out a loan offer which you will then discuss with your solicitor.

Making an appointment with a solicitor

You'll then need to meet with a solicitor to make sure you understand what you're agreeing to. They'll also take copies of your identification and arrange for you to sign the mortgage offer acceptance.

Completing!

The provider releases the funds to your solicitor and all the legal and advice fees are paid.

If you're not sure if equity release is right for you and your circumstances, our friendly advisers will be able to talk you through your options.

You can have an initial chat with us for free - no obligation. Call us on 0800 144 8244*, or if you'd prefer, request a call back and we'll call you back within 30 minutes.

Why release equity from your home?

Equity release is an increasingly popular way to access money. It allows you to dip into the money you've put into your home over the years without the upheaval of moving home.

There are a number of benefits of equity release. For example, you might want or need to:

  • Help younger generations onto the property ladder
  • Have some extra money on top of your pension
  • Pay off debts
  • Pay a bill or cost you didn't expect
  • Carry out home improvements
  • Simply improve your lifestyle

It's important to know that the money you release from your home with a lifetime mortgage can affect your entitlement to means-tested state benefits. A lifetime mortgage will also reduce the amount of inheritance you'll leave behind.

Can I release equity from my home?

To release equity from your home you must be:

  • Aged 55 or over
  • Living in your own home
  • Looking to borrow at least £10,000
  • A resident of England, Wales, Scotland or Northern Ireland
  • The owner of a home worth at least £70,000

To take out equity release you'll need to speak with a qualified equity release adviser. They'll talk you through your options, listen to any concerns you may have about releasing equity, and will help you to find the right solution for your circumstances.

Have an initial, no obligation chat with one of our friendly, specialist advisers for free.

If you decide to go ahead, OneFamily Advice charge a single advice fee of £950 on completion - no matter the size of your loan.

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Have a free chat today

Request a call back or call us on 0800 144 8244*

*Lines are open Monday to Friday 9am to 5.30pm and Saturday 10am to 2pm. Calls may be recorded and monitored for training purposes. Calls to freephone numbers are free from UK landlines and personal mobile phones. With business mobiles the cost will depend on your phone provider. If you'd like to know more, please ask your provider.

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Try our equity release calculator

See how much equity you could release by entering your details below.

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By providing your details you are giving us consent to contact you with equity release information. Read the OneFamily Privacy Notice.

Important: The loan amounts above are an illustration of the amount you could borrow. The actual amount may vary depending on your individual circumstances. The figures are not guaranteed and do not constitute an offer to lend. The loan amount will need to pay off any existing mortgage secured against the same property.

You may also be interested in:

What is equity release and how does it work?

Equity release can help you turn your property into valuable retirement income.

How long does equity release take?

A lifetime mortgage application usually takes between 5 and 8 weeks in total.

Meet the OneFamily Advice team

Get to know the advice team who will guide you through the lifetime mortgage process...

How much does equity release cost?

Find out about all the costs you can expect if you're considering equity release.