What is equity release and how does it work?

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

What is equity release?

When it comes to your house, your equity is its market value, minus any debts you have secured against it.

Equity release is the process of turning that equity into cash that you can spend, without having to sell your home.

How does equity release work?

There are two ways to release equity from your home – taking out a loan against part of it, with a lifetime mortgage, or selling part of it, with a home reversion plan.

Lifetime mortgages

By far the most popular form of equity release. A lifetime mortgage is a loan that is repaid when you die or enter long term care. The lender recives their proceeds from the sale of your home upon your death or entry into long term care.

Home reversion plan

With a home reversion plan you sell a portion of your home. When you die or enter long term care your house will be sold and the home reversion provider will get their share of the proceeds.

With either product you can receive the money in a lump sum or over several instalments.

To release equity you need to have an equity release product recommended to you by a qualified adviser who has considered your unique circumstances. There are lots of things to consider, including inheritance and how equity release payments could affect your benefit entitlements or tax obligations.

Before identifying the right equity release product, the adviser will also help you to consider alternatives such as downsizing, remortgaging to a standard mortgage product or a retirement interest-only mortgage.

Equity release isn’t always the right solution, but it is working for lots of people. Over 85,000 people released almost £4 billion of equity from their properties in 2019.

Equity release has changed

In the video, two of our Advisers Anna and James, discuss how the industry has changed over the last 15 years to the benefit of consumers. They look back at why the equity release industry has a bad reputation and explain the many ways in which it has changed.

Find out if a lifetime mortgage is right for you

Get a free initial consultation with one of our advisers. We charge a simple fixed fee of £950 for our advice, only payable if you accept our recommendation.

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See how much equity you can release

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

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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.