What is Equity Release > How Equity Release Could Help You

How equity release could help you

Tax-free cash from equity release could help resolve a number of financial challenges - our guide explains how it could help you.

Equity release could help meet your financial needs

If you are a homeowner aged 55+ and find that your regular income is not enough – or that you need extra cash for a one-off purchase – you could meet the shortfall through equity release. 

On average, 70,000 people in the UK each year use equity release as a way to meet a wide range of financial goals, according to the Equity Release Council. These goals include everything from clearing a mortgage to boosting annual income.

We’ve put together this guide to the types of circumstances and financial challenges that equity release may be able to help you with. There are of course options other than equity release and we look at those too.

You can also get professional advice on your options through Equity Release Wise: call us on 0808 178 3055 or request a call back and we can arrange a no-obligation appointment with one of our selected equity release advisers.

Are you ‘cash poor, asset rich’?

It would be great if we all could enjoy an excellent financial situation in later life, but sadly that isn’t always the case. Many people simply don’t have the income they need, despite working hard all their life. But they may be wealthy in terms of property: being ‘cash poor, asset rich’ is a common situation for homeowners in later life.

If this sounds like your situation, it could be time to find out whether there’s a suitable solution. One option could be via equity release, which lets you access cash tied up in your home with no repayments, interest or rent to pay. The plan ends and the release is paid back through the sale of your home only when you pass away or move into long-term care.

Equity Release Wise brings you access to equity release quotes and deals through one of the UK’s largest equity release specialists. Find out how much you can borrow: check here for an estimate of how much tax-free cash you may be able to release from your property wealth. Alternatively, talk to one of our friendly consultants by calling 0808 178 3055 or request a call back.

What financial needs are you looking to meet?

There are all kinds of reasons for equity release. It’s often chosen as a way to generate extra income on a regular basis or as and when needed. But income is just one reason for choosing equity release. Many people use equity release to pay off a mortgage, so that they remove the burden of monthly payments. Others use equity release to pay off an interest-only mortgage, clearing the capital owed at the end of the mortgage term.

Equity release is also often chosen as a way to escape the burden of debt repayments. People ask us ‘can I release equity to pay off debt?’ and the answer is often ‘yes’. Equity release is a way to clear debts that put a strain on monthly expenses. Debts that have been cleared this way include credit cards and overdrafts.

Homeowners take out a lump sum lifetime mortgage to meet other needs for a one-off cash release. Equity release for home improvements is especially popular. Other big purchases include buying a car or caravan, or enjoying a much-needed holiday.

“Equity release is a way to clear debts that put a strain on monthly expenses.”

Another common reason for equity release is to help out loved ones financially. In particular, many people have accessed cash to help their children or grandchildren with a deposit to get on the property ladder. You could view it as giving them an inheritance early, when they need it the most rather than later on.

Finally, some people are using equity release to buy a second home or a buy-to-let property. If you have the aspiration to do either of these but lack the necessary funds, equity release could help to make your dream a reality.

To find out more about potential reasons for equity release, see our guide: What can I use equity release money for? You can also talk to our friendly equity release consultants by calling 0808 178 3055 or request a call back.

Check your eligibility

Call us on 0808 178 3055 and we’ll arrange a free, no-obligation appointment and lifetime mortgage advice* from a specialist who will confirm whether you are eligible. If you’re unable to talk now, request a call back and we’ll call when it’s convenient for you.

Check my eligibility

What are some alternatives to equity release?

There are of course other ways that you may be able to access a lump sum or an additional income after the age of 55, some of which you may have considered. Here are some equity release alternatives, which may or may not be viable for you:


The most obvious way to access money if you own your own home is downsizing. This has its advantages and can be a more financially suitable decision than equity release. However, many people love their home and simply don’t want to move. They may also like being near their family and friends, and don’t want to move away from them. Other people could stay in their local area but only by moving to a smaller home, and that isn’t something that would work for them.  

Taking a lodger

Renting out a room in your home could be a way to generate additional income. Unsurprisingly however, many people don’t want to start sharing their home with a stranger. Make sure you understand the law around renting out a room when considering this option, including your responsibilities as a resident landlord.

Boosting your income through work

There is of course also the option of delaying retirement or taking a part-time job instead of taking out an equity release plan. This is a viable option for some people and you can usually work without it affecting your state pension or private pension, although you may be liable for tax depending on the size of your total income.

Other alternatives to equity release

Living off your savings or investments is another option that could make financial sense instead of taking out an equity release plan. Another potential option is a home improvement grant. If you are considering equity release for home improvements on health grounds, you may be able to apply for a local authority grant instead. However, a grant may not be available to meet all of the costs of adapting your home.

What are your financial goals? 

You can discuss all of the alternatives to equity release listed above and more with our selected equity release advisers. They have a legal and regulatory obligation to make sure you understand and consider alternatives to equity release schemes before making a decision. They will also explain the benefits and risks of equity release, taking into account your personal circumstances.

Plan review icon

Already have a lifetime mortgage? You could switch for a better deal

Now could be a good time to switch to a different lifetime mortgage. You may be able to release more tax-free cash due to being older than when you took out your existing plan. An increase in your property’s value or being in poorer health could also qualify you for further cash. Interest rate changes may also save thousands over the lifetime of your plan.

Why not arrange a free review* to find out if switching works for you?

Did you know?

Government statistics reported that average weekly income for UK pensioners rose from £168 in 1995 to £331 in 2020. However, pensioners aged 75 and over had only seen their average income rise to £302 per week.

How can we help?

To find out more about equity release or arrange a consultation with an adviser, please call or request a call back and we’ll be happy to help further.

Let’s talk

Let us help with your questions or arrange a quote.

Call 0808 178 3055

Request a call back

Book a call at a time that suits you and we’ll call you back.

Request a call back

Are you eligible?

Find out how much tax-free cash you could release.

Check now

Apply for your no-obligation equity release quote

Find out if you qualify for equity release and how much you could borrow. Just click ‘Get started’ or call us on 0808 178 3055 and one of our team will be delighted to help arrange a free consultation and quote*.

Start your quote journey icon

1. Start your quote journey

Simply click ‘Get started’ to begin your search for the best plan for your circumstances.

Tell us what you need icon

2. Tell us what you need

Fill out some simple details about your situation so we can start to prepare your quote.

Compare your best deals icon

3. Compare your best deals

You’ll get personalised quotes tailored to your unique circumstances and goals.

Answering your questions

Still unsure of a few things? We’ve got you covered with answers to some of our most frequently asked questions.

  • Can I release equity to pay off debt?

      Many people have retired or are approaching retirement with unpaid debts. With income often dropping in retirement, servicing these debts can become especially difficult. This is why equity release is often chosen as a way to break free from the burden of regular repayments on debt. Debts that have been cleared this way include mortgages, credit cards, loans and overdrafts.

  • What costs are involved with a lifetime mortgage?

      Just as with a normal residential mortgage, you should be aware of costs involved in setting up an equity release lifetime mortgage. Your adviser will make sure you understand these in full before you decide whether to take out a plan, but below is a summary.

      Your lender will typically charge valuation, arrangement and completion fees, with further fees payable to the solicitor who acts for you. Some of these fees can be paid from the money you borrow, so you may not have to worry about finding them from your existing savings.

      Our selected advisers naturally charge an advice fee – but remember that any initial advice or information you receive from them is completely free and without obligation. You only pay them a fee if you apply AND your case completes.

      Once a plan is taken out, there aren’t normally any fees. One exception is an early repayment charge that some lenders request if some or all of your lifetime mortgage is paid off before you pass away or move into long-term care.

  • What are the potential risks of a lifetime mortgage?

      A lifetime mortgage has worked for thousands of over 55s in need of tax-free cash. But it’s important to understand some potential risks before deciding if it’s right for you: 

      • Lifetime mortgage interest rates are calculated daily and the interest is added to the amount you owe each month. The amount owed therefore increases and reduces any equity left in your home when the plan ends, unless you choose to make interest payments while the plan is running.
      • Taking equity out of your home will mean that the inheritance you leave to loved ones will reduce. Each time you take money from the plan, the level of possible inheritance will reduce. 
      • If you give some of the money you release to family as a gift, they may be liable to pay inheritance tax in the future.
      • You may have to pay an early repayment charge if you choose to pay back some of the loan early.
      • Borrowing money and building up your savings through a lifetime mortgage may affect your entitlement to some means-tested state benefits. During your appointment with one of our selected equity release advisers, they will help you establish whether your benefits could be affected.

      Equity Release Wise can connect you with a highly trained and knowledgeable adviser who will take the time to explain everything to you, so you can be absolutely sure about your decision.

Your equity release options

See the links below for guides to the different types of lifetime mortgage, or call 0808 178 3055 or request a call back to arrange a consultation with our selected equity release advisers.

Product lump sum icon

Lump sum lifetime mortgage

Access a tax-free cash lump sum if you’re a homeowner aged 55 or over. You retain full ownership and can stay at home until you pass away or move into long-term care.

Read more about lump sum lifetime mortgage plans
Product drawdown icon

Drawdown lifetime mortgage

Instead of making a one-off cash withdrawal, you take an initial cash sum and additional funds as and when you need them. This helps to reduce the total interest you pay.

Learn more about drawdown lifetime mortgage plans
Product interest only icon

Interest-only lifetime mortgage

A more cost-effective method of equity release where you make voluntary interest payments to reduce or prevent compound interest building up.

Discover more about interest-only lifetime mortgage plans
Product enhanced icon

Enhanced lifetime mortgage

Certain health conditions or lifestyle factors could qualify you for higher cash releases or lower interest rates. A simple questionnaire is all that’s needed to check eligibility.

Read more about enhanced lifetime mortgage plans
Product second home icon

Second home lifetime mortgage

If you have a second home you may be able to secure a lifetime mortgage against it, or make your dream of a second home come true with a release from your main residence.

Read more about second home lifetime mortgage plans
Product buy to let icon

Buy-to-let lifetime mortgage

These specialist plans could enable you to release equity from a buy-to-let property, or to use the wealth in your home to help you make a buy-to-let investment.

Read more about buy to let lifetime mortgage plans

Another, much less common form of equity release may be a more suitable alternative to a lifetime mortgage. A home reversion plan is a type of equity release where you sell all or part of your property at less than market value in return for a lump sum, a regular income, or both. You stay in your home as a tenant, paying no rent, until you pass away or move into long-term care.