What is equity release?
Equity release is a way for homeowners aged 55 and over to take some of the money tied up in their home as tax free cash, without having to move out or, in most cases, make any monthly repayments. The most common type is a lifetime mortgage.
How a lifetime mortgage works
A lifetime mortgage is a loan secured against your home. You still own and live in your home. You can take the money as a single lump sum or in smaller amounts over time, called drawdown. You do not normally make monthly repayments. Instead, interest is added to the loan each year and the whole amount, the money you took plus the interest, is repaid when the last borrower dies or moves into long term care, usually from the sale of the home.
How much can you release?
The amount depends mainly on the age of the youngest homeowner and the value of your property, not on how much of the home you already own outright. The older you are, the higher the percentage you can release. You can see an indicative figure with our equity release calculator.
The key protections
Plans that meet Equity Release Council standards include a no negative equity guarantee, which means you or your estate will never owe more than your home is worth. You also have the right to stay in your home for life, and most plans let you move home or make voluntary repayments to control the interest.