If you’re thinking about accessing some of the cash tied up in your home using equity release, you’re probably keen to know how much money you could get.
Usually you can release between 20% and 55% of the value of your property, however there are two key factors equity release providers consider when calculating how much equity you can release:
- The value of your property
- our age (or that of the youngest homeowner)
The second point helps determine how long you are likely to have the plan for. Lenders generally won’t see any return on equity release until you die or move out into long-term care. So, the younger and healthier you are when you release equity, the longer it may take for the lender to see a return.
Equity release providers will also consider:
- Whether you own the property outright - if you still have a mortgage or any other debt secured against your home, you will need to pay this off first with the money you release.
- The construction type and condition of your home
How do you calculate equity release?
To calculate how much equity you can release, all you need to know is the market value of your property and the outstanding balance of any existing mortgages. You then subtract the mortgage balance from the property value and the figure you are left with is your equity.
- Property value - £300,000
- Existing mortgage - £50,000
- Equity - £250,000
If you don’t have a mortgage on your property, the full value would be the amount of equity you have in your home.
What percentage of equity can you release from your house?
The amount you can release from your house generally increases with age. The older you are, the more you can release. For example, a 55 year old may be able to release up to 24% whereas a 70 year old could release as much as 41%.
The value of your property will also be considered as well as its construction and condition.
So how much equity can you release?
All lenders have a minimum lending amount which is typically £10,000 to £15,000, although premium schemes can have much higher thresholds. The maximum amount you can release will depend on the value of your property, your age and in certain circumstances, your health and lifestyle.
The following gives you a guide as to how much equity you could release get from your home. For a more accurate figure and personalised illustration, we recommend you use our equity release the calculator.
||Value of your home
Can your state of health affect the amount of equity you can release?
If you have health concerns, you may be able to release a higher percentage of equity from your property with a type of equity release called an enhanced lifetime mortgage.
The amount your equity release provider is willing to lend is partly based on life expectancy and how long it will be before the loan is repaid. Therefore, the shorter the life expectancy, the more equity you can release from your home.
Here are a few health and lifestyle examples that may dictate how much equity you can get could release through an enhanced lifetime mortgage:
- Height and weight (your body mass index)
- Whether you smoke
- If you take medication
- Diabetes or high blood pressure
- Existing heart condition or angina
- Multiple sclerosis
- Parkinson’s disease
Examples of how much cash you could release
If you are in good health then the standard maximum loan to value applies, however, if you qualify for a medically enhanced option then you could borrow more as indicated in the examples here, but for a more personal quote please ask us to contact you:
Age 60: Standard maximum 36% Medically enhanced maximum 49%
Age 70: Standard maximum 46% Medically enhanced maximum 54%
Age 80: Standard maximum 57% Medically enhanced maximum 57%