Equity Release Frequently Asked Questions & Guidance

Equity release can be a complex decision, and it’s natural to have questions before speaking to an adviser. Below, we’ve answered some of the most common equity release questions we’re asked by homeowners aged 55 and over who are exploring their later‑life options.

This page is designed to help you understand how equity release works, the risks to be aware of, and when it may – or may not – be suitable, before you decide whether to seek regulated advice.

Equity release usually takes the form of a lifetime mortgage or a home reversion plan and is a long‑term commitment. It may affect your estate and your entitlement to means‑tested benefits.

If you’d prefer to talk things through, we offer FCA‑regulated advice and support homeowners across Staffordshire, and surrounding areas, including Burton‑on‑Trent, Swadlincote and Ashby‑de‑la‑Zouch.

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Eligibility & Getting Started

Am I eligible for equity release?

Equity release is generally available to UK homeowners aged 55 or over, subject to property type, value, and lender criteria. Eligibility depends on factors such as:
  • Your age (or the age of the youngest applicant if applying jointly)
  • The value and type of your property
  • Any existing mortgage or secured borrowing
Meeting the basic criteria does not mean equity release will be suitable for your circumstances. A personalised assessment is always required before any recommendation can be made.

Can I take equity release if I still have a mortgage?

Yes, in many cases. If you still have an outstanding residential mortgage, it will usually need to be repaid at the time equity release is arranged. This is typically done using some of the money released, rather than from your savings.

How much equity could I release?

The amount available depends mainly on:

  • Your age
  • The value of your home
  • The type of plan chosen

Generally, the older you are, the higher the percentage of your property value you may be able to release. Typically, this is a percentage of your property’s value rather than the full amount. Online calculators can provide an estimate, but the exact amount depends on provider criteria and a full assessment.

Try our equity release calculator to get an idea of how much you could potentially borrow.

How long does equity release take?

From initial enquiry to completion, equity release typically takes around 6–12 weeks, although this can vary depending on factors such as valuations, legal work, and individual circumstances.

How Equity Release Works

What is equity release?

Equity release allows homeowners aged 55+ to access some of the value in their home while continuing to live in it. The money released is usually repaid when:
  • You pass away, or
  • You move into long‑term residential care

What is a lifetime mortgage?

A lifetime mortgage is the most common type of equity release.
It is a loan secured against your home, where:

  • You retain ownership of the property
  • Interest is added to the loan over time
  • Repayment is usually deferred until death or long‑term care
Because interest usually compounds over time, the amount owed can increase significantly if no payments are made. Some lifetime mortgages allow voluntary interest or capital repayments, while others do not.

What is a home reversion plan?

Home reversion plans involve giving up ownership of part or all of your property and are now used far less frequently than lifetime mortgages

With a Home Reversion Plan, you sell part (or all) of your property to a provider in exchange for a lump sum, while retaining the right to live in the property for the rest of your life.

Home reversion plans are less commonly used than lifetime mortgages and are suitable only in certain circumstances.

What is drawdown equity release?

Drawdown equity release allows you to release money in stages, rather than taking it all at once. Drawdown is often chosen to help reduce interest costs and provide flexibility over when funds are taken.

Costs, Interest & Repayments

Will I have to make monthly payments?

Many equity release plans do not require mandatory monthly repayments.
Instead, interest is added to the loan and compounds over time. Some plans now offer the option to make voluntary payments, which may help control the long‑term cost.

How does interest work with equity release?

Interest is charged on the amount you have borrowed. If no payments are made, interest is added to the total loan balance. This means the amount owed can increase significantly over time. The term “roll-up” interest is often used to describe this.

Can I repay equity release early?

Early repayment is possible, but early repayment charges (ERCs) may apply and can be substantial. Some plans offer flexibility, such as downsizing protection or partial repayment allowances. This will depend on the specific product chosen.

What fees are involved?

Equity release costs may include:

  • Adviser fees
  • Lender arrangement fees
  • Valuation fees
  • Legal fees

Your adviser should explain all costs clearly before you proceed. Fees are usually payable only if you proceed with a recommended plan.

Is equity release taxed?

The money released through equity release is not classed as income and is tax‑free.
However, holding or gifting the money may have tax implications, and this should be discussed as part of your advice process. Tax treatment is separate from how released funds may affect means‑tested benefits, again this should be checked when considering equity release.

Moving House, Inheritance & Long‑Term Care

Will I still own my home?

With a lifetime mortgage, yes – you remain the owner of your property. With a home reversion plan, ownership depends on how much of the property is sold.

Can I move house after taking equity release?

Most equity release plans are portable, meaning you may be able to transfer the plan to a new property. The new property must meet the lender’s criteria.

Will I be able to leave an inheritance?

Equity release will reduce the value of your estate, often significantly, depending on how long the plan runs and interest accrual. Some plans include features such as inheritance protection, but this typically reduces the amount you can release.

Will equity release affect long‑term care decisions?

If you move permanently into residential care, the equity release loan is usually repaid from the sale of your property.
It can also affect entitlement to certain means‑tested benefits.

Will my family ever be left with debt?

Equity release products that meet Equity Release Council standards include a no negative equity guarantee.
This means your estate will not owe more than the value of your home when it is sold.

Risks, Safeguards & Alternatives

What are the main risks of equity release?

Equity release can:

  • Reduce the value of your estate
  • Affect means‑tested benefits
  • Become expensive over the long term due to compound interest
These risks increase the earlier a plan is taken and the longer it run. It is not suitable for everyone.

What alternatives should I consider first?

Before equity release, it’s usually worth exploring alternatives such as:

  • Pension income or drawdown
  • Downsizing
  • Using savings or investments
  • Other later‑life lending options

A regulated adviser can help you explore these alongside equity release.

Is equity release right for everyone?

No.
Equity release is a long‑term commitment and should only be considered after carefully weighing up the risks, alternatives, and your personal circumstances.

Getting Local, Regulated Advice

If equity release is something you’re considering, personalised, regulated advice is essential before proceeding. We provide FCA‑regulated equity release advice and support homeowners across Staffordshire and surrounding areas, including Burton‑on‑Trent, Swadlicote and Ashby‑de‑la‑Zouch.

You can:

  • Ask a question by email
  • Request a no‑obligation conversation
  • Speak to a local adviser who understands your circumstances

Important information

Equity release may involve a lifetime mortgage or a home reversion plan. To understand the features and risks, ask for a personalised illustration. Equity release may affect the size of your estate and your entitlement to means‑tested benefits.