How to release equity from your home

For many UK homeowners, equity release is a useful way to supplement income, repay debts or make life easier for loved ones.

What is equity?

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

So, if the outstanding balance of your mortgage is £250,000 and the value of your property is £300,000, then you have £50,000 equity in the property.

Or to put it another way, your equity consists of any deposit you paid on your house purchase, plus the amount you’ve already paid off your mortgage as well as any increase in the value of your home since you purchased it. If your mortgage has been paid off completely, then you will have 100% equity.

Why release equity from your home?

Equity release is an increasingly popular way to access more cash in retirement and there are a number of benefits of equity release. For example, you might want or need to:

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Help younger generations onto the property ladder

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Supplement your pension

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Pay off debts

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Meet an unexpected expense

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Carry out home improvements

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Improve your lifestyle

Equity release allows you to dip into the wealth you’ve accumulated in your property to cater for these expenses, without the upheaval of moving home.

How to release equity from your home

You can release equity from your home with one of the two types of equity release products: lifetime mortgages and home reversion plans. Lifetime mortgages offer greater flexibility to a wider range of customers and for the purposes of this piece, we will focus on them.

A lifetime mortgage is a complex product and can only be taken out through a professional, regulated adviser. Although lifetime mortgages are complex products, the process of obtaining one can be broken down into 7 key stages:

Consultation

Your adviser will get to know you and discuss your financial situation as well as your goals and expectations

Fact Find and Recommendation

Your adviser will go into greater detail, researching the right product(s) for you before making their recommendation.

Application

Having weighed up the options with you, your adviser will complete the application and send it to your provider.

Valuation

While the provider considers your application, they’ll send someone out to value your property.

Mortgage Offer

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

Solicitors appointment

During the appointment the solicitor will ensure you understand the nature of the agreement you are entering into, take copies of your identification and arrange for you to sign the mortgage offer acceptance.

Completion

The provider releases the funds to your solicitor with all legal and adviser fees being settled on completion.

Just remember:

To find out more about the cost and duration of the equity release process, read our articles How much does equity release cost? and How long does equity release take?

Can I release equity from my home?

This quick checklist will help you find out if you qualify for equity release. You must be:

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

Find out more about OneFamily Advice or get in touch below.

How much can I borrow with equity release?

How much equity you can release will depend on several factors, such as your age, the value of your home and the size of your outstanding mortgage balance.

Get an estimate of how much you could borrow by using our lifetime mortgage calculator below and download your free equity release guide.

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Maximum loan amount:

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.

Speak to an adviser

Our friendly team of advisers are ready to help you, so why not spare a few minutes for a free initial consultation? You can ask any questions and we’ll be able to let you know how much you could borrow.

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