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Equity Release for Homeowners Aged 55 and Over: Unlock Your Home’s Value

Equity release allows homeowners aged 55 and over to access the value tied up in their property without the need to sell or move to another home.
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Mortgages | Investments | Wealth Management | Pensions | Protection | Equity Release

What is Equity Release?

Equity release is a way of releasing the wealth tied up in your property without having to sell it and move to another home. You could either borrow against the value of your home, or sell all or part of it in exchange for a lump sum or regular monthly income. It’s also possible to release more equity from your property later in life if required. 

Equity release is designed to help customers over the age of 55 years who own their property outright or have small mortgages left to pay.
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Lifetime Mortgages vs Home Reversion Plans

There are two main types of Equity Release: Lifetime Mortgages and Home Reversion Plans. To help you make an informed decision, we have outlined the differences between each type of Equity Release and what factors to consider.

Lifetime Mortgages

A lifetime mortgage is a type of mortgage where you choose to extract your fund through a single lump sum or in smaller amounts over time, to the maximum limit agreed with your provider. 

With a lifetime mortgage, you can also retain some of the property’s value as an inheritance for family members if this is something you are considering.

By choosing a lifetime mortgage, you retain full ownership of your home and the loan’s interest can be fixed or rolled up. The loan and rolled-up interest are repaid by your estate when you pass away or, depending on your circumstances, move into care permanently. For a couple, it would be based on the last to survive. 

Lifetime mortgages can offer the ability to make monthly interest payments in part or full, therefore maintaining the debt to the minimum amount before interest.

The amount released depends on your age and the value of the property. Some providers can offer larger sums to those with particular past or present medical conditions, or lifestyle factors.

Home Reversion Plans

A home reversion plan allows you to access all, or part, of the value of your property while retaining the right to remain in it rent-free. With home reversion, the provider will purchase all, or a percentage, of your house.

You will understand precisely what portion of the property you have parted with and what has been ring-fenced for later use. The percentage you retain in your property always remains the same, regardless of the change in property value, unless you decide to take further cash releases.

At the end of the plan, your property is sold, and the sale proceeds are allocated according to the remaining proportions of ownership.

Like lifetime mortgages, you may be able to access more funds, depending on your age and medical conditions. 

You will be provided with a cash lump sum or regular payments, and a lifetime lease guaranteeing you the right to stay in your property rent-free for the rest of your life. You’ll be able to live in your home freely, precisely as before.

Things to consider with Equity Release

For many people, unlocking money tied up in property can make a real difference, whether you’re thinking about family, consolidating debt, or even home improvements. However, you should consider several important factors before deciding on equity release:

Cost

Equity release can be more expensive when compared to an ordinary mortgage. When taking out a lifetime mortgage, you will typically be charged a higher interest rate than you would on a standard mortgage, and the debt can grow quickly if the interest is rolled up.

The plan provider charges more interest because they must factor in safeguards such as a no negative equity guarantee (so you will never owe more than the value of your home, regardless of interest payments due, and any changes in property value) and a fixed interest rate for the life of the plan. These safeguards mean the interest rate is different to an ordinary mortgage.

Term

For lifetime mortgages, there is no fixed ‘term’ or date by which you are expected to repay your loan. The interest rate of a lifetime mortgage will not change during the life of your contract, unless you take additional borrowing, and then it will only apply to that cycle of extra borrowing.

Value of home

In most cases, you are more likely to get a higher value sale when selling your home in the open market rather than through a home reversion plan.

Future needs

If you release equity from your home, you may be unable to rely on your property for money you need later in your retirement, such as long-term care.

Flexibility 

A lifetime mortgage can impact your flexibility. For example, if you move home and take your lifetime mortgage with you, you may not have enough equity in your home when you decide to downsize later in life. In this instance, you may have to repay some of the mortgage.

Impact on State Benefits

The money you receive from equity release may affect your entitlement to state benefits.

Tax

You will not usually have to pay Income or Capital Gains Tax on the amount you receive when it is released from your main home.

Fees/Charges

You must pay arrangement fees which include solicitor and advice charges. If you change your mind, there could also be early repayment charges to pay, although these would not apply on death or long-term care planning.

Estate Planning

When you take an interest roll-up plan, you will have less to pass on to your family as an inheritance.

We're here to help you!

We take pride in offering a personal service that considers your individual circumstances. Your financial situation is unique, so we work hard to understand your goals and aspirations.

Whatever your need for releasing equity, we will provide a complete advice package to ensure you make the right choice.

Your adviser will consider the following when determining the appropriate solution for you:

What your motivations and needs are for releasing equity.
How you wish to receive the money, for example, ongoing or in a lump sum.
How you wish to service the interest, for example, monthly or roll-up.
The proposed interest rate, fees, and charges.
The importance of estate planning and the selection of a solution which offers an equity guarantee, or a means of paying the ongoing interest.
If you want to release equity now and again in the future. Drawdown solutions that allow you to take an initial lump sum but with a facility to take more later

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Equity release, including lifetime mortgages and home reversion plans, will reduce the value of your estate and can affect your eligibility for means tested benefits.

Types of Equity Release Schemes

Equity release allows homeowners aged 55 and over to unlock the value of their property and access tax-free cash without moving. Whether for retirement income, home improvements, or unexpected expenses, equity release offers a flexible solution with options like lifetime mortgages or home reversion plans.

Lifetime Mortgages

Lifetime mortgages allow homeowners aged 55 and over to release tax-free cash by securing a loan against their property. Typically arranged on a roll-up basis, interest is added to the loan over time and repaid when the home is sold. We can help you understand your options, calculate how much you could release, and guide you through the process to make the right choice for your needs.
Book your first appointment for free here > 

Home Reversion Plans

A home reversion plan allows you to sell part or all of your property in exchange for a tax-free lump sum and a guaranteed lifetime lease. You can stay in your home rent-free or with a nominal rent, while ensuring an inheritance for your beneficiaries. We can help you understand if this option is right for you and guide you through the process.
Book your first appointment for free here > 

Flexible Drawdown

Flexible Drawdown schemes offer a pre-agreed 'cash reserve' that allows you to access funds as needed, ideal for things like home improvements, holidays, or large purchases. Interest is only charged on the amount drawn, making it potentially more cost-effective than other equity release options. We can help you understand the benefits and drawbacks of this option to ensure it meets your financial goals.
Book your first appointment for free here > 

Home Income Plan

A home income plan releases equity through a lifetime mortgage or home reversion plan and invests it into an annuity, providing a guaranteed income for life. A cash lump sum may also be available, though it could be limited. We can help you understand whether a home income plan is right for you, considering the benefits and potential drawbacks of different options.
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Protected Equity

Many equity release schemes offer a no-negative equity guarantee, with some allowing you to protect a fixed share of your home’s value. For example, protecting a 30% share ensures that at least 30% of your property’s value is preserved for you or as an inheritance. We can help you explore these options to secure your financial future and inheritance.
Book your first appointment for free here >

Impaired Life

Certain equity release providers may allow you to release more capital if you suffer from specific health conditions. This can help you access additional funds to meet your needs. We can guide you through the process and help you understand how these health-based criteria could benefit your equity release plan.
Book your first appointment for free here >

Frequently Asked Questions

What is equity release?

Equity release is a way to access the value tied up in your home without having to move. There are two main types: lifetime mortgages, where you borrow against your property and retain ownership, and home reversion plans, where you sell part or all of your home in exchange for a lump sum or regular income.

How much can I release from my property?

The amount you can release depends on factors such as your age, health, and the value of your home. Typically, you can release between 18-50% of the value of your property.

Will I still own my home?

Yes, with a lifetime mortgage, you retain ownership of your home. However, with a home reversion plan, you sell part or all of your home to the provider, but you can continue to live there rent-free or by paying a nominal rent.

How does interest work on a lifetime mortgage?

Interest on a lifetime mortgage is added to the loan, and you don't have to make regular payments. The interest compounds, meaning it’s charged on both the original loan and any interest that accumulates, and is paid back when your home is sold, typically when you move into care or pass away.

Can I leave an inheritance with equity release?

Yes, with some equity release schemes, you can protect a portion of your home’s value to leave as an inheritance. For example, if you protect 30%, that 30% will be guaranteed for you or your beneficiaries, regardless of changes in property value.

What is the 'no negative equity' guarantee?

Most equity release plans come with a ‘no negative equity’ guarantee, which ensures that you will never owe more than the value of your home when it is sold, even if the value of your property decreases over time.

Are there any health conditions that could help me release more equity?

Yes, some providers allow you to release additional capital if you have certain health conditions. This is because health conditions may reduce life expectancy, allowing you to access more funds.

Is equity release safe?

Equity release is regulated by the Financial Conduct Authority (FCA) and comes with built-in safeguards like the ‘no negative equity’ guarantee. However, it’s important to seek whole of market advice to ensure it’s the right option for you.

What are the costs of equity release?

There are usually setup fees, such as legal and valuation costs, and the loan itself accrues interest. It’s important to fully understand the costs and potential impact on your estate before proceeding.

Can I repay the loan early?

While early repayment is generally possible with some plans, it may come with fees or penalties. It’s essential to check the terms and conditions of your chosen plan before making any early repayments.

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Call us on: 01489 585 548
Email us: info@bealsfs.co.uk
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The guidance and/or information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.

Approver Quilter Financial Services Limited and Quilter Mortgage Planning Limited. March 2025

Registered office address: Unit 1 Fulcrum 2 Solent Way, Whiteley, Fareham, England, PO15 7FN. Registered in England and Wales under reference 08286166
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