How does medically enhanced equity release work?

Do you qualify for medically enhanced equity release?

Written in line with our editorial policy.

Some equity release providers offer medically enhanced equity release plans. If you live with or have had one or more qualifying health conditions, you may be eligible for more tax-free cash or a lower interest rate.

In our guide to medically enhanced equity release (also known as impaired health equity release) we cover the essential information about how it works and eligibility criteria. We look at:

• What is equity release?
• How might I benefit due to poor health?
• Why do some equity release providers offer medically enhanced terms?
• What are the qualifying medical conditions?
• How many people qualify for medically enhanced equity release?
• Which lifestyle factors might also mean I get a better equity release deal?
• Get your personalised equity release quote.

Do you want to find out if you qualify for medically enhanced equity release? Our selected advisers are available to check your eligibility and provide quotes on enhanced terms from leading UK providers. 

Just call us on 0808 178 3055 or request a call back and we’ll arrange a no-obligation appointment with an adviser for you. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.

What is equity release?

For homeowners aged 55 or over, equity release is a way to unlock tax-free cash from your home without having to move. There are no monthly repayments, unless you choose to make them. 

With a lifetime mortgage – the most popular type of plan – you still own 100% of your home and have the right to live there for life. Only when you pass away or move into long-term care is the loan plus the accumulated interest repayable. This is done via the sale of your home, with any money left over available to you or your estate.

If you’re too young to take out an equity release plan, don’t despair: there are ways to release equity if you are under 55.

How might I benefit due to poor health? 

Usually in life, it’s hard to see any benefit in poor health. But equity release is one of those rare times where there might be a financial benefit from living with current or past health conditions.

That’s because some equity release providers offer an enhanced lifetime mortgage. With these plans, you will be asked to complete a medical questionnaire. If you currently live with or have had one or more qualifying conditions, you may be eligible for one or more of these enhancements on your plan:

• A lower equity release interest rate than you’d get with a standard lifetime mortgage.
• A larger tax-free cash lump sum.
• A larger drawdown facility to access more money in the future.

Why do some equity release providers offer medically enhanced terms?

When you take out equity release, the plan provider will take your age into account when deciding how much to offer you and how much interest to charge. This is because they make assumptions about how long they are likely to wait before getting their money back when you pass away or move into long-term care.

To put things bluntly, they are making calculations based on average life expectancy. The longer you are likely to live, the less money they will offer you, and/or the higher the interest rate they’ll offer you.

Some providers go one step further than using just your age to calculate life expectancy. They also look at your health – and some conditions will lead to an assumption that you may live a shorter than average lifespan. As a result, you could benefit from better terms.

Of course, nobody can accurately predict how long anyone will live. You may go on to live much longer than the average for someone with your condition, even if you are offered medically enhanced equity release.

What are the qualifying medical conditions?

A number of conditions could qualify someone for medically enhanced equity release. Here are a few examples:

• High blood pressure
• Diabetes
• Parkinson’s
• Multiple sclerosis
• Heart attacks or angina
• Stroke
• Some types of cancer

Even if you have been diagnosed with a condition in the past that’s no longer a problem, you may still qualify for medically enhanced rates. Being on prescription medication for a condition that is under control can also qualify you, depending on the medication and dosage. 

How many people qualify for medically enhanced equity release?

According to one leading equity release provider, six in ten people could borrow more or get a better interest rate with an enhanced lifetime mortgage. 

It’s interesting to look at how some specific medical conditions are more common as we get older:

High blood pressure. Age UK say that 1 in 2 adults aged over 65 have high blood pressure.

Diabetes. According to diabetes.co.uk, 1 in 10 people over 40 have been diagnosed with type 2 diabetes.

Cancer. Cancer Research UK say that ‘half of all cancers are in people over the age of 70’.

Lung diseases. The British Lung Foundation report that the number of deaths from lung disease is ‘highest among those aged over 65’.

As you can see, it’s not unusual for some applying for equity release to have a qualifying condition. That’s why we recommend that you consider completing a medical questionnaire to find out if you qualify for a medically enhanced equity release plan. 

What lifestyle factors might also mean I get a better equity release deal?

It’s not just health conditions that could potentially qualify you for an enhanced lifetime mortgage. Certain lifestyle factors may also mean you are eligible. These include:

• Having a high or very low body mass index (BMI)
• History of smoking
• History of drinking alcohol

Get your personalised equity release quote 

To find out more about medically enhanced equity release, call our friendly team on 0808 178 3055. They can arrange an appointment with one of our selected advisers who can answer all your questions, check your eligibility and get personalised quotes.

During your no-obligation initial appointment with an adviser, you and your partner (if a joint application) will be asked a few simple questions about your medical history and lifestyle. The questions should be simple to answer and won’t necessarily add significantly to the equity release timescales when applying.

Your answers will allow your adviser to find out if you qualify for medically enhanced equity release. They will then search plans from leading enhanced equity release providers to find the best available release amounts and interest rates.

You can also request a free call back here or get a free quote and an initial indication of how much tax-free cash you could unlock.

About Richard Groom. A writer with 20+ years’ experience across several sectors including financial services, Richard has a passion for writing clear and simple content on even the most complex of subjects. In his spare time, Richard loves exploring the hills and mountains of the UK on long walks with his faithful cocker spaniel. Follow Richard on LinkedIn