*Updated February 2025*
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What is equity release?
How does equity release work?
What types of equity release are there?
Equity release explained
How long does it take to release equity from my house?
Why is equity release so popular?
Is equity release right for me?
For UK homeowners aged 55 and over, equity release is a way of accessing some of the cash tied up in your home, tax-free, without having to move. This can be spent however you wish, such as on a one-off purchase, like a holiday or family event, home renovations, or to give you additional income in retirement.
In this guide, we explain all you need to know about equity release and how it works.
Equity release works by unlocking money tied up in the value of your property. The ‘equity’ in your home is the difference between the value of your property and any loans you have against it. For example, if your property is worth £250,000 and you have a mortgage of £50,000, your equity would be £200,000. You may be able to borrow some or all of this amount, depending on your age and circumstances.
Different products allow you to choose whether you receive the cash as a one-off lump sum or as an initial lump sum followed by smaller amounts (known as drawdown).
There are two types of equity release to choose from:
1. Lifetime mortgage – available to UK homeowners aged 55+
A lifetime mortgage is the most popular form of equity release. Like any mortgage, this is a loan secured against your home. But unlike standard mortgages, there are no monthly repayments to make unless you choose to. Instead, the compound interest accumulates until it’s repaid when you die or move permanently into long-term care and your home is sold.
2. Home reversion scheme – available to homeowners aged 60+
A home reversion plan is an agreement where you sell part or all of your property directly to the plan provider in exchange for a tax-free cash sum. You remain living in your property rent-free for life or until you move into long-term care.
There may be alternative ways to access funds that could be more appropriate for you. A professional financial adviser can help you decide whether equity release is right for you and if so, which type of plan might best suit your needs.
Why not try our free, easy-to-use equity release calculator to see how much you could potentially borrow.
What's the difference between equity release and a lifetime mortgage?
There’s no difference between equity release and a lifetime mortgage. Equity release is the umbrella term used to describe products that enable homeowners to release equity from their home. A lifetime mortgage is the product most commonly used to do this.
As specialists in later life planning, we've put together clear, expert information to help you make a more informed decision on how equity release works and whether it's right for you.
Find out more about the two types of equity release.
Find out more about who is eligible for equity release.
How much will it cost to release equity on your property?
Find out how much you could release.
How regulations and safeguarding ensure equity release is safe?
Our expert helps you weigh up the benefits and risks.
A look at the lowest rates available.
How much tax-free cash could you unlock?
A look at borrowing options for the over 55's.
With a lifetime mortgage, it usually takes around 6 to 8 weeks from making your application to receiving the first payment. The timeframe for arranging a home reversion plan is similar, but it can take a little longer.
Either way, you should allow sufficient time to speak to an equity release adviser. They will be able to talk through your individual requirements and circumstances and offer advice on the most suitable options for you.
Equity release has become a major part of later life financial planning, with many UK households turning to their home as a way to provide a cash injection or additional income in retirement. If you have equity in your home, releasing it now could mean a more comfortable lifestyle for you and the people you care about, with no need to give up your home.
Unlocking some of the cash tied up in your home can make a big difference to you in later life. However, equity release is not for everyone. Make sure you consider all possible alternatives and weigh up the pros and cons carefully with a suitably qualified equity release adviser.