Equity release allows homeowners aged 55 and over to access value tied up in their property without selling. The most common product is a lifetime mortgage — a loan secured on your home that rolls up with compound interest and is repaid when you die or move into long-term care.
Maximum borrowing depends on your age and property value — typically 20% LTV at 55, rising to 50%+ at 80. All Equity Release Council members must offer a no-negative-equity guarantee. Always take independent advice from a qualified equity release adviser.
If you are aged 55 or over and own your home, equity release allows you to access the wealth tied up in your property without having to sell or move. This calculator estimates how much you could release through a lifetime mortgage — the most popular type of equity release.
A lifetime mortgage is a loan secured against your home. You retain full ownership and can continue living there for life. The loan plus rolled-up interest is repaid when you die or move into long-term care, usually from the sale of your property. You can choose to take the money as a lump sum, in regular instalments, or as a drawdown facility that lets you access funds as needed.
Interest rates on lifetime mortgages are typically higher than standard mortgages — usually between 5% and 7% as of 2026. Because interest compounds over many years, the amount owed can grow substantially. For example, borrowing £50,000 at 6% interest over 20 years would mean roughly £160,000 is owed when the loan ends. This is why it is crucial to discuss equity release with family members and a qualified financial adviser.
Before committing to equity release, consider alternatives. Downsizing to a smaller property releases cash without debt. A retirement interest-only mortgage requires monthly interest payments but preserves more equity. Some people use pension drawdown or postpone retirement. Speaking to an independent financial adviser who specialises in later-life lending is strongly recommended — they can compare all options impartially.
Ensure any equity release product you consider has a no negative equity guarantee, meaning you will never owe more than your home is worth. All products approved by the Equity Release Council include this protection.
Equity release lets homeowners aged 55 and over access cash tied up in their property without selling or moving out. The money can be taken as a lump sum, in drawdowns, or as a combination of both. The loan is repaid when you die or move permanently into long-term care, usually from the sale of your home.
The most common type is a lifetime mortgage, where you borrow money secured against your home. Interest "rolls up" (compounds) over time and is added to the loan. Because you typically don't make monthly repayments, the debt grows year after year — and this growth accelerates as the interest compounds on an ever-larger balance.
Equity release products that meet ERC (Equity Release Council) standards include a no negative equity guarantee. This means you'll never owe more than the value of your home, even if property prices fall.
| Type | How It Works | Interest | You Keep Ownership? |
|---|---|---|---|
| Lifetime Mortgage (Roll-Up) | Borrow against home. Interest compounds. No monthly payments. | Fixed or capped, compounds | Yes |
| Interest-Paying Lifetime Mortgage | Borrow against home. You pay interest monthly. | Fixed, does not compound if paid | Yes |
| Drawdown Lifetime Mortgage | Approved facility. Take cash as needed. Interest only on released amounts. | Fixed, compounds on released cash only | Yes |
| Home Reversion | Sell a share of your home to a provider at below market value. Live rent-free. | None — you sold a share | Partially (keep rest) |
The biggest risk with equity release is compound interest. Unlike a standard mortgage where you pay off interest monthly, a roll-up lifetime mortgage adds interest to the loan balance — and next year's interest is calculated on that larger amount.
Example: You release £100,000 at 6.5% AER with no repayments:
This is why some plans allow partial repayments (typically up to 10% per year without early repayment charges). Making even small repayments can dramatically reduce the final debt.
Yes — releasing equity can affect means-tested benefits. These include:
The key threshold is savings over £10,000. For every £500 above this, your weekly Pension Credit or Housing Benefit is reduced by £1. If savings exceed £16,000, most means-tested benefits stop entirely.
Before committing to equity release, consider these alternatives:
Equity release is a Financial Conduct Authority (FCA) regulated product. This means:
For free, impartial guidance, contact MoneyHelper (formerly the Money Advice Service) on 0800 011 3797 or visit moneyhelper.org.uk. They offer a free equity release guide and can help you understand your options.
All calculations are verified against official HMRC thresholds and rates for the 2026/27 tax year. Figures are updated within 24 hours of any HMRC announcement. Calculations are for guidance only — consult a qualified accountant for personalised advice.