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What is Equity Release > How Much Equity Can You Release?
Find out what affects how much equity you can release – and use our calculator to check your maximum release
We know that you will have specific financial goals in mind when considering unlocking cash tied up in your home. So ‘How much equity can I release?’ is therefore one of the most common questions we are asked at Equity Release Wise.
How much you can release depends on several factors, including the property’s value and your age. We look at these and other factors in this guide – but if you want to get straight to finding out how much you could unlock, get a free quote or talk to one of our friendly consultants by calling 0808 178 3055 or request a call back. Then we can connect you with specialist equity release advisers for further help, including confirmation of how much equity you can release.
The Equity Release Council’s market statistics include information on how much people are releasing from their properties. For example, the average equity release amount with customers choosing a lifetime mortgage in 2021 was around £124,000.
This is just an average figure of course, and people have released much less and much more. To decide how much you should release, you will want to balance your financial needs with the long-term costs and financial implications of equity release.
A lifetime mortgage is easily the most popular form of equity release in the UK. This is where you access tax-free cash as a secured loan paid back through the sale of your home when you pass away or move into long-term care.
How much equity can I release if I have an outstanding mortgage?
Please note that no matter how much you release, you will need to first use some of the money to pay off any outstanding mortgage or other debts secured on the property. After that, how you spend the money is up to you.
This means that you can release less money for other purposes if you still have an outstanding mortgage on the property. Please see below for more information.
Your equity release provider will consider several circumstances when deciding how much equity you can release from your home:
Property value
Whenever you look into ‘how much equity can I release from my home?’ the amount available will be based on a percentage of the property value. This is why providers typically carry out property valuations when people apply for equity release.
Your equity
As well as its value, the amount of equity you hold in it will also affect how much equity you can release from your home. To work out how much equity you have, you simply take the value of the home and subtract any mortgage or other debts secured against it. So, if your home is worth £300,000 and the outstanding mortgage is £50,000 with no other secured debts, the equity will be £250,000.
The type, location and condition of your property
A lifetime mortgage is repaid through the sale of the property, so lenders will want to be confident that it will at least hold its value. Factors such as the state of repair, type of construction and location will therefore matter – our guide to eligibility for equity release explains further.
For example, how much equity you can release on your house if it’s of non-standard construction may be less than with a regular bricks-and-mortar property. This is because some lenders don’t accept non-standard properties, so your choice of lender may therefore not include those offering the maximum equity release amount.
Your age
Put simply, the older you are, the more you will be able to borrow with a lifetime mortgage:
These figures are a guide: our selected advisers will be able to confirm how much equity you can release by getting quotes and comparing what’s available from leading providers.
Your health or lifestyle
Equity release is one of the few times where health issues can benefit you financially. With an enhanced equity release, you may be able to release more cash or benefit from lower interest rates if you are living with certain health conditions such as high blood pressure, diabetes and a history of heart attacks. Lifestyle factors such as smoking could also qualify you for an enhanced plan.
How much equity can you release with health or lifestyle issues? The amount of extra cash you can release will depend on the severity of your condition or the specifics of your lifestyle choices. Our selected advisers can steer you through a health and lifestyle questionnaire, and then get quotes for enhanced lifetime mortgages from leading equity release providers.
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.
Lifetime mortgage lenders usually have a minimum release amount, typically starting at £10,000 with lenders including Legal & General equity release. Other lenders have different minimum equity release amounts on some products, including Aviva equity release with a £15,000 minimum on its lump sum lifetime mortgage. Some specialist individual lifetime mortgage products come with a minimum release that is higher still.
If you are looking to release a small amount, why not contact us at Equity Release Wise to find out what’s possible? When our selected advisers look at how much equity you can release from your home, they will be able to advise on the minimum release amounts from each provider.
So far, we have looked at what affects the maximum and minimum amount of equity you can release. Another factor to take into account is whether you wish to access all the money in one go, or in instalments over time:
The drawdown option may appeal if you would welcome the extra flexibility. It also typically reduces the overall cost of the loan, because interest is only payable on the amount of cash you release, rather than the total sum in your reserve.
As well as confirming how much equity you can release from your property, our selected advisers will find plans from leading providers that best suit your needs for a lump sum or drawdown. Call us on 0808 178 3055 or request a call back and we’ll arrange a no-obligation appointment with FCA-regulated advisers to explore your options.
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?
If you decide to release cash through a lifetime mortgage, you can choose either a lump sum lifetime mortgage where you take all the cash in one go, or a drawdown lifetime mortgage where you access your cash in a number of payments spread over months or years.
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.
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Still unsure of a few things? We’ve got you covered with answers to some of our most frequently asked questions.
The maximum cash available through a lifetime mortgage is based on a percentage of your property’s value. Typically, the maximum equity release percentage available with a lifetime mortgage ranges from 20% to 60% of the property’s value. Your age will be one of the main factors taken into account, and the older you are, the more you can release.
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.
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:
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.
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.
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.
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.
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.
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.
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.
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.
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.
