How much equity can I release?
Simon Stanney
Last updated 30th August 2024 by Scott Robertson
4 min read
How much equity you can release, if you're eligible, is based on the value of your house and your age. It's usually between 20% and 60% of your property's value.
What impacts how much equity I could release?
There are three main things that providers look at when working out what your figure will be:
- Whether your property is eligible – your provider needs to be sure that your home can be sold on the open market when the time comes. So, things like your property type or age may affect its eligibility.
- How much your property is worth – your equity release provider will arrange for your home to be professionally valued.
- Your age and health – this is used to estimate how long you’re likely to live. If it's a joint application it will be based on the age and health of the youngest applicant.
When deciding how much equity you could release, providers will consider:
- Type of property construction – what materials the building is made of or if it's a listed building
- Condition of property
- Debt secured against your property – for example the amount of outstanding mortgage (this will need to be paid off first from any equity you release)
Some equity release plans are subject to compound interest. This is where you pay interest on the original loan amount plus the interest that’s already been added to the loan. The longer you live after releasing equity, the higher the total amount owed will be.
But, if your provider is a member of the Equity Release Council and meets their standards, your plan will be fully protected by a ‘no-negative equity’ guarantee. So, you’ll never owe more than what your home is worth.
But, even with this guarantee, taking equity release may result in limited or no property equity remaining. This could reduce your financial options in the future.
Some plans, known as interest-only lifetime mortgages allow you to pay off the interest on a monthly basis, so the size of your loan never goes up. Other plans may allow you to make regular or one-off payments to keep the total amount owed down.
A home reversion scheme is another type of plan. These involve selling all or part of your home rather than borrowing against it. So, they aren’t usually subject to interest.
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What is the maximum amount of equity I can release?
The maximum amount you can borrow with equity release is usually up to 60% of the value of your home, according to MoneyHelper.
The exact amount depends on your age, the value of your property, and the other factors mentioned above.
For example, if a 55 year old and 85 year old had the same property value, the 85 year old would be able to release more equity. This is shown in the table below.
Examples of how much equity you could release
The table below gives an idea of how much cash you could release if you're eligible for equity release.
| Your home's value | ||||||
|---|---|---|---|---|---|---|
| Your age | £100,000 | £200,000 | £300,000 | £400,000 | £500,000 | |
| 55 | £17,500 | £35,000 | £52,500 | £70,000 | £87,500 | |
| 65 | £27,500 | £55,000 | £82,500 | £110,000 | £137,000 | |
| 75 | £38,000 | £76,000 | £114,000 | £152,000 | £190,000 | |
| 84 | £47,000 | £94,000 | £141,000 | £188,000 | £235,000 | |
*These figures are for illustration purposes only and are based on a SunLife Sunrise lifetime mortgage. It is only an indication and isn't guaranteed. Figures correct as of August 2024.
To get a better indication, try our equity release calculator. It can also give you an idea of when you could receive the money.
What if I already have equity release but want to release more?
If you already have an equity release plan, you might still be able to release more money. You will need to speak to your provider to find out.
They may be able to offer you a rebroking service to see if there's a better plan with better rates.
You may have to wait before you can release more money and it may incur more costs. So it's important to get all the information from your provider first.
Many providers offer a drawdown lifetime mortgage. This means you can take a smaller initial lump sum, followed by additional amounts as and when you need to.
Is there an alternative to equity release?
Taking out equity release is a big decision, so consider the pros and cons first. There are a number of alternatives including:
- Downsizing
- Moving to a less expensive area
- Using other existing assets, savings or investments
- Financial support from family or friends
Your financial adviser will consider and discuss these options with you as part of your advice journey.
You'll also want to talk to your family, as equity release will reduce the inheritance you can leave. Have a read through our equity release guide to explore the details.