Equity release lets homeowners aged 55+ unlock tax-free cash tied up in their property without having to move. The most common type is a lifetime mortgage. It’s a major, long-term decision — here’s how it works and what to weigh up.
Key facts (2026)
- Available from age 55; you keep living in your home.
- Average advertised rate around 7% (the cheapest deals are lower).
- You can typically release 20–55% of your home’s value, depending on age.
- Equity Release Council plans carry a no-negative-equity guarantee.
- Regulated advice is mandatory before you can take a plan.
How equity release works
With a lifetime mortgage (by far the most popular option) you borrow against your home and stay its owner. Interest is usually “rolled up” — added to the loan rather than paid monthly — and the loan plus interest is repaid when you die or move into long-term care, normally from the sale of the property. Some plans let you pay interest or make voluntary repayments to control the balance. A less common option, home reversion, involves selling part of your home to a provider.
How much can you release?
The older you are, the more you can usually release. As a rough guide:
| Age | Typical amount you can release |
|---|---|
| 55 | ~20–30% of home value |
| 65 | ~30–40% |
| 75+ | ~45–55% |
For example, a 65-year-old with a £300,000 home might release roughly £90,000–£135,000.
The trade-offs
- Because interest compounds, the amount owed can grow quickly and reduce what you leave behind.
- It can affect your entitlement to means-tested benefits.
- Early repayment charges may apply.
- Alternatives — downsizing, a retirement-interest-only mortgage, savings or family help — may suit you better.
Your safeguards
Equity release is regulated by the FCA. Use a provider that’s a member of the Equity Release Council, which guarantees you can stay in your home for life and that you’ll never owe more than your home is worth (no-negative-equity guarantee). You must take independent advice first.