Equity Release Guide 2025: FAQs, Rules & Free Calculator
Considering equity release? Whether you’re exploring a lifetime mortgage, wondering if you're eligible, or simply want to understand the rules and process, our comprehensive FAQ covers everything you need to know. Use our equity release calculator or book a free consultation to talk through your options.
What is 'Equity Release'?
Equity release allows homeowners aged 55 and over to access the wealth tied up in their property without moving. It can provide a lump sum or regular income, making it useful for boosting retirement income, funding home improvements, or helping family members financially. All products must be advised sales under Financial Conduct Authority (FCA) regulations, meaning a qualified adviser will explore all available options and recommend a plan tailored to your needs.
How much Equity Can I Release?
Wondering how much money you could release from your home? Our free equity release calculator gives you an instant estimate based on your age, property value, and a few simple details—no personal info required. Get a quick idea of what’s possible, and take the first step with confidence:
Equity Release Calculator
How long does equity release take?
The equity release process for a lifetime mortgage typically takes 6 to 8 weeks from your first advice appointment to receiving your funds. However, the timeline can vary depending on how quickly paperwork is completed, whether any legal or property valuation issues arise, and how responsive all parties are.
Here’s a rough breakdown of the key stages:
Advice & Application
(1–2 weeks)
After your initial consultation, we’ll recommend the most suitable lifetime mortgage and submit your application.
Valuation & Offer
(2–3 weeks)
The lender will arrange a property valuation and issue your formal mortgage offer.
Legal Work
(2–3 weeks)
Your solicitor will complete the necessary legal checks and paperwork before funds are released.
Funds
Released
Once all checks are
complete, your money is typically released within a
few working days.
Who can apply for equity release?
The minimum age for equity release is 55 years old. You must also own a UK property worth at least £70,000, and meet the lender’s criteria, which may include property type, condition, and credit history.
What are the different types of equity release?
The two main types of equity release are Lifetime Mortgages and Home Reversion Plans. Both are regulated by the Financial Conduct Authority. Lifetime Mortgages let you borrow against your home while retaining ownership, whereas Home Reversion Plans involve selling part or all of your property in exchange for a cash lump sum. We specialise in Lifetime Mortgages at Need Financial Planning.
What is a 'Lifetime Mortgage'?
A Lifetime Mortgage is a loan secured against your home that allows you to release cash while keeping ownership. The loan, plus rolled-up interest, is repaid when you pass away or move into long-term care. You don’t need to make monthly repayments, but you can choose to pay interest voluntarily to reduce costs. You can take the money as a tax-free lump sum or smaller regular payments, with some plans allowing additional borrowing later.
Interest Roll Up Explained:
With a mainstream mortgage customers pay the interest due on a monthly basis. With a lifetime mortgage, the interest due is simply added to the mortgage account. This means that interest accrues over the term of the mortgage and can significantly impact on the amount owed over time.
Many lifetime mortgages now have a facility to allow payments to be made, which can alleviate this impact. This facility has been written into the Council’s Product Standards, so it must be included in all new products coming to market that providers wish to be Equity Release Council compliant.
What is a 'Home Reversion Plan'?
A Home Reversion Plan lets you sell part or all of your home in exchange for a tax-free lump sum while continuing to live there rent-free for life. At the end of the plan, the property is sold, and proceeds are divided according to ownership shares. We do not offer Home Reversion Plan services at Need Financial Planning.
Equity Release FAQs
What are the alternatives to equity release?
Alternatives include downsizing, using savings or investments, taking a Retirement Interest-Only (RIO) mortgage, or checking eligibility for government benefits. These options should be considered before proceeding with equity release.
Can I take out equity release if I already have a mortgage?
Yes, but you must first repay your existing mortgage with the funds released. Any remaining money can then be used as you wish.
Will I be able to move home if I've taken out an equity release loan?
Most Lifetime Mortgages allow you to transfer (port) the loan to a new property, provided it meets the lender’s criteria. There may be costs involved, such as valuation fees, legal costs, and potential early repayment charges if you do not port the loan.
What are the risks of equity release?
The main risks include reduced inheritance, interest roll-up increasing the debt over time, potential impact on means-tested benefits, and early repayment charges. However, all plans approved by the Equity Release Council include a no-negative equity guarantee.
Could equity release affect my benefit entitlement?
Yes, releasing equity may affect means-tested benefits such as Pension Credit or Council Tax Reduction. Your adviser should review this with you before you proceed.
Can you repay an equity release loan early?
Yes, but early repayment charges may apply. Check your plan’s terms and speak to your provider before making a decision.
What is the Equity Release Council?
The Equity Release Council is the industry body that sets consumer protection standards. As members, we follow its strict code of conduct to ensure ethical advice and safe products for clients.
Keen to Learn More about Equity Release?
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IMPORTANT: With investments, your capital is at risk. Pensions and investments can go down in value as well as up, so you could get back less than you invest.
Need Financial Planning Ltd is registered in England and Wales no. 10901658. Registered office, 123 High Street, Broadstairs, Kent, CT10 1NQ. Authorised and regulated by the Financial Conduct Authority. Need Financial Planning Ltd is entered on the Financial Services Register https://register.fca.org.uk/ under reference 977136. If you wish to register a complaint, please write to [email protected] or telephone 01843 228800. A summary of our internal complaints handling procedures for the reasonable and prompt handling of complaints is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at www.financial-ombudsman.org.uk or by contacting them on 0800 0234 567.
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