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Equity Release Age Range

Looking at what the minimum age is for equity release and what to do if you’re under 55

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 18th July 2019 *

What age do you have to be for equity release?

We receive lots of enquiries asking for clarification on the equity release age limits.. The age of 55 is universally regarded as the minimum age for equity release in the UK. As a result we also receive a lot of requests for information on what alternatives there are to equity release for anyone under 55.

The good news is there are a lot of different options available to you if you’re younger than the minimum age for equity release. For the right advice, make an enquiry with us once you’ve read through this article and we can arrange for one of the expert advisors we work with t to get in touch.

In this article we will cover:

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How old do I have to be to qualify for equity release?

What is the minimum age for equity release?

Typically, the minimum eligible age for equity release is 55. For joint equity release mortgages this applies to the youngest applicant. It is possible for the second applicant to be younger than 55 and still be accepted, however, it would require a transfer of their share of equity in the property across to the older applicant.

The younger of the two applicants, if under 55, may also be asked to agree to an occupancy waiver in order for a lender to approve an application.

Is there a maximum age for equity release?

Some lenders apply a maximum age at the outset of the mortgage and may wish to verify that the applicant is capable of making a decision to borrow money at this stage of their life. Most lenders apply a maximum age of 85 but a few will go as high as 95.

Lenders rarely apply a maximum age at the end of the term as equity release schemes are designed to remain open until either the applicant dies (or in the case of a joint equity release mortgage, the last living applicant) or they go into long-term care.

The table below will give you an idea of which ages equity release is possible at, and remember, the older you are, the higher the percentage of the value of your home you can potentially release.

Age of borrower Is it possible?
Equity Release age 30 No
Equity Release age 40 No
Equity Release age 45 No
Equity Release for over 55s Yes: No lender restrictions
Equity Release for over 60s Yes: No lender restrictions
Equity Release for over 65s Yes:No lender restrictions
Equity Release for over 70s Yes: Lender restrictions unlikely
Equity Release for over 80s Yes: But some lenders cautious of over 85
Equity Release for over 90s Yes: But some lenders may decline

How does my age affect what equity release mortgage I can get?

Your age, your health and the value of your property are all key factors, which determine how much you will be allowed to borrow for an equity release mortgage. In a nutshell, the older you are the more you are able to borrow.

Rather than any affordability criteria, which would govern how much you could borrow for a conventional mortgage, a lender’s medical health assessment will form the basis for the loan to value they will offer.

If you were to take out an equity release mortgage at age 63, for example, you would be able to borrow a higher amount than if you applied at age 57. In general, equity release schemes can be more attractive for the over 80s than for the over 70s and so on. It all works very similar to how retirement annuity rates are calculated.

The maximum loan to value available will differ from lender to lender. Depending upon the factors outlined above, most lenders will offer a maximum loan to value of 50%, some will offer 55% and a few will go as high as 60%.

What equity release schemes are available to over 55s?

The two main types of equity release products are lifetime mortgages, which you can apply for if you’re over 55, and home reversion plans.

Lifetime mortgages

With a lifetime mortgage, the loan is secured against your property but you don’t have to make any payments during your lifetime (unless you choose to). The debt and the accrued interest is usually paid through the sale of the property when the borrower either dies or moves into long-term care.

Home reversion plans

Taking out a home reversion plan involves handing over the ownership of all or part of your home to a reversion provider in exchange for either a lump sum or regular payments. These products often have higher minimum age requirements, with some lenders only offering them to customers aged between 60 and 65.

Given that most home reversion providers don’t offer anywhere near market value for the properties they take on, most brokers will tell you to avoid home reversion plans, but if you want to know more about them, the advisors we work with would be happy to lay out all of the facts for you and suggest potential alternatives.

What alternatives are there to equity release if I’m under 55?

It can be frustrating if you’re looking to release equity in your house but are under 55 and, therefore, unable to consider equity release as an option. However, here  are some alternatives for you to consider:

Secured loan

Also known as second charge mortgages, a secured loan allows you to raise further funds whilst offering your property as security for the lender. They are typically available to anyone in the UK who is an existing homeowner, with sufficient equity in their property and has a steady income.

In terms of age limits, secured loans will tend to favour youth rather than the older borrowers who are eligible for equity release schemes. For more information on secured loans take a look at our article here

Personal loan

As with secured loans, personal loans are more generally aimed at those who are still working and earning an income rather than those who are reaching retirement.

Personal loans tend to be a more favourable option than secured loans if you only need to borrow a fairly small amount over a short period of time.

Remortgage

As an alternative to either of the above options you could consider a remortgage of your existing arrangements if you’re not currently locked into a particular fixed or tracker rate. Again, this option would favour those who are still earning an income with sufficient equity in their property.

If you’d like to speak with someone regarding any of the above options, make an enquiry and we will arrange for one of the specialist advisors we work with to get in touch.

What are the alternatives to equity release if I’m over 55?

Downsizing

One alternative to an equity release mortgage would be to consider selling your existing property and downsizing to a smaller one.

So, for example if your main residence was sold for £400,000 and you bought another for £250,000 you would have released £150,000 equity whilst avoiding any interest costs and/or fees associated with an equity release scheme.

However, the desire to downsize does not always coincide with the need to raise extra money. This is when an equity release mortgage may best suit your requirements.

Retirement Interest Only (RIO) mortgage

A retirement interest only (RIO) mortgage allows you to borrow money whilst in retirement and repay the interest monthly until you die, sell your home or move into a care home. Once your house is sold, the debt is repaid.

However, whilst you may be able to borrow higher amounts with this option, you would also need to pass an affordability assessment, therefore, this may only suit those with a regular, fixed retirement income.

If you’d like to speak to one of the  retirement interest only (RIO) mortgage experts we work with, make an enquiry and we can arrange this for you.

Why you should speak to an expert equity release broker

At Online Mortgage Advisor we can offer you a first-class service tailored to your own specific needs with access to the most experienced brokers available that can provide:

  • Holistic, whole of market, solutions
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  • OMA accredited advisors
  • LIBF Training course

Speak to an equity release expert

If you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 18th July 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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