Equity release lets homeowners aged 55+ release 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 | around 20–30% of home value |
| 65 | around 30–40% |
| 75+ | around 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.
Equity release: frequently asked questions
What is equity release?
Equity release lets UK homeowners aged 55 or over release tax-free cash from the value of their home without having to move. The most common type is a lifetime mortgage, where you borrow against your property and the loan plus interest is usually repaid when you die or move into long-term care.
How much can I release from my home?
Most providers let you release between roughly 20% and 60% of your property’s value. The exact amount depends mainly on your age and your home’s value, the older you are, the higher the percentage you can typically release.
How much does equity release cost?
Lifetime mortgage interest rates in 2026 typically range from around 6% to 8% and are usually fixed for life. Because interest compounds, the total amount owed can grow significantly over time. You may also pay arrangement, valuation and adviser fees.
Will I still own my home?
With a lifetime mortgage you keep full ownership of your home and can live there for life. With the less common home reversion plan, you sell all or part of your home to a provider in exchange for a lump sum or income.
Is equity release safe?
Plans from providers that are members of the Equity Release Council come with safeguards such as a ‘no negative equity’ guarantee, so you can never owe more than your home is worth. Equity release is regulated by the Financial Conduct Authority, and you must take regulated advice before proceeding.
This information is general and not financial advice. Equity release is a major financial decision, always speak to a qualified, FCA-regulated adviser before proceeding.