Equity release criteria – Who is eligible for equity release?

*Updated February 2024*

Can you be refused equity release?

As long as you meet all the equity release criteria set out below, you’re unlikely to be refused equity release, particularly if you have a specialist adviser to support you. However, be aware that you could be refused if:

• you don’t have buildings insurance in place. Equity release providers require you to be covered for the full rebuild value of your home, which should be index linked with inflation.
• your home is not in good order or is urgently in need of repairs. At the very least, your lender will require you to carry out the repairs before they consider your application.
• your home is of non-standard construction materials such as concrete, timber or metal-framed buildings, although very high-quality, modern builds may be acceptable to some providers. The equity release council recommend you make your adviser aware of any non-standard construction.

 

1. What are the age limits for equity release?

1.a - What is the minimum age for equity release?

The minimum age for equity release is 55, this means that you, or the youngest homeowner if you own your own property jointly must be at least 55 when you apply for a lifetime mortgage.

When equity release providers are deciding how much money they can lend you, they will base their calculations on the age of the youngest applicant. This means that if you co-own your property with someone younger than 55 (or 65 for a home reversion plan), you will need to remove their name from the deeds before you can arrange equity release.

1.b - What is the upper age limit for equity release?

Some lenders stipulate a maximum age of 90, although most plans have no upper limit.

The older you are, the more cash you can usually release. Find out more about how much you can release.

Here are the upper age limits of some of the leading lifetime mortgage lenders:

Lender	Upper Age limit
L&G	None
Aviva	None
Nationwide	90
Just	None
LV=	None
Sunlife	None
One Family	85
Pure Retirement	None
Crown Equity Release	95
Canada Life	90

 

2. Ownership and use of the property

Your eligibility for equity release will depend on the type of property you want to release equity from and the lender. While most houses in the UK are freehold, most flats are leasehold ie. you own your property, but the freeholder owns the land or building it sits in. If you own a leasehold property with only limited time left on the lease, your eligibility for equity release will depend on the lender.

The same will apply to properties that are not your main home, such as buy to let properties and holiday homes.

For a rental property with tenants in place, your lender will probably insist they commit to a six-month assured tenancy agreement.

For equity release on a holiday home, you will probably need to guarantee that it is not rented out for more than 4 weeks at a time.

An independent equity release specialist such as Age Partnership, will be able to advise you on which providers will consider equity release on properties with tenants or holiday homes.

 3. Can you get equity release if you still have a mortgage on the property?

If you have already paid off your mortgage you will be eligible for equity release. You may be able to get equity release on a property that still has an outstanding mortgage, this will depend on:

• The size of your remaining mortgage
• The equity that you release will be used to pay off your mortgage and the money left over will come to you to spend as you wish.

4. Does where you live affect your eligibility for equity release?

If you live in England (including the Isle of Wight), Wales or Scotland, you will qualify for equity release plans from almost, if not all, providers. However, some providers exclude residents of the Isle of Man and if you live in Northern Ireland, your choice of provider is likely to be very limited.

Your equity release provider will also look carefully at any buildings or operations near the property that could affect its value and saleability – sewage works, for example, or a sub-station.

5. How much the property is worth

Your property must be worth £70,000 or more to be eligible for equity release, with some providers setting a higher minimum value. If you want to get an approximate value for your home, visit Money Saving Expert or Yopa or Zoopla.

Technically there is no upper limit, but some providers do specify a maximum value to safeguard themselves from risk.

6. How the property is constructed

Equity release lenders will consider most 'standard construction' properties. That means houses, flats and bungalows built of brick or stone, with pitched tiled or slate roofs.

Until recently it was practically impossible to get equity release on properties that didn't fit this description, but some providers are now more tolerant of non-standard features. For instance, if your home has a flat roof or an annexe, or if it's partly used for business, you may still be accepted.

7. The condition of the property

Your equity release loan will need to be repaid when the last borrower dies or moves into long-term care. Providers will take a close look at its condition and saleability before agreeing to lend you any money, so your home will need to be in good order when you apply and then maintained to a reasonable standard.

8. How much equity you want to release

How much equity you can release will vary according to your age, your home's value, and how much equity you hold in it. Depending on your age, you could release between 20% and 55% of your home's value – tax free.

The minimum you can release is £10,000 and some providers also have a maximum lending limit.

Find out how much you could release

9. Does your health affect equity release?

Yes, the state of your health could affect your eligibility for equity release. If you have any life-limiting health issues, lenders will usually offer to lend you more, on the basis they will probably be repaid sooner.

A full medical is not required for equity release, You will usually be asked to complete a simple health questionnaire.

10. Your credit history

Equity release has one major advantage over traditional mortgages; the provider doesn’t need to take account of your income or expenditure. This is because you don’t have to make any regular repayments.

Even if you choose to make repayments, you still won't be subject to any income or expenditure checks.

Lenders are generally quite tolerant if you have a bad credit history. You may not have to undergo a credit check, but ultimately it will depend on the lender and how bad your situation is. For example, if you have been declared bankrupt, you won’t be accepted for equity release until you are discharged.

Other people living in your home may be affected

Anyone not named on your equity release application who lives in your home may be affected when you take out equity release. For instance, your children, a lodger or your partner if you’re not applying in joint names.  For them to continue living with you, they may be required to waive any right to stay in your property after you die or move into long-term care.

This waiver will also apply to anyone who moves into your home in the future.

If you take out equity release alone and get married further down the line, you may not be able to add your partner’s name to your plan. This could leave them having to sell your shared home to pay off the lifetime mortgage or home reversion plan when the time comes.