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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: 4th December 2020*

Anaemic state pensions and low cash saving rates have left many retirees struggling to pay the bills. This has led to many people contacting us about equity release, specifically wanting to know how much capital they can access through it.

The good news is that the advisors we work with are experts when it comes to equity release, even if you’ve had bad credit or have been declined by a lender, They’ll be able to see if you have enough equity to release, and how to do so. 

Here’s what you’ll learn in this article:

For guidance and advice tailored to your situation, call us on 0808 189 2301 or make an enquiry and we’ll match you with an independent mortgage broker for a free, no obligation chat about your equity. 

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How much equity can I release from my home?

The maximum amount of equity you can release from your property will depend on how long you’re likely to live (determined by your age and health), your property type, how much it’s worth, and whether you own 100% of it outright. Many lenders will lend up to 55% of your property’s value, though some could go higher or lower.

How do my age and health affect how much I can borrow?

The minimum allowable age for equity release is 55. As a general rule, the amount you’ll be able to borrow will increase as you get older. In a joint application, the age of the youngest applicant is taken into account.

Your health and lifestyle is another factor. Certain conditions are correlated with reduced life expectancy, and people with those conditions may be eligible to release more equity.

There are more than a hundred conditions which qualify, so speak with an advisor for more information tailored to your circumstances.

How does my property affect how much I can borrow?

How much equity release you can get largely depends on the market value of your home. This will be the biggest factor in how much equity you can release, as the calculation is taken as a percentage of the current market value.

That said, the kind of property you live in, along with its construction, are also factors. Lenders are often more hesitant to work with non-standard properties, such as those made of unusual materials, or that are listed.

What is the maximum equity release I can take?

Regulations laid down by governing body the Equity Release Council has capped the maximum amount of capital you can release, and some lenders will insist on minimum loan amounts to ensure it’s worth their while. 

Restrictions imposed by the Council’s ‘no negative equity’ guarantee ensure that the maximum equity release percentage of value probably won’t exceed 50%, even if you meet the criteria for age and health.

So, how much equity can you release from your home? In terms of loan to value (LTV), most people end up with between 20% and 50% equity release.

The tale below will give you an idea of the maximum equity release loan you can get based on your age and the value of your property…

Your Age Value of Home (in thousands)
  £15k £200k £250k £300k £350k £400k
55 £31.5k £42k £52.5k £63k £73.5k £84k
60 £37.5k £50k £62.5k £75k £87.5k £100k
65 £46.5k £62k £77.5k £93k £108.5k £124k
70 £54k £72k £90k £108k £126k £144k
75 £61.5k £82k £102.5k £123k £143.5k £164k
80 £63k £84k £105k £126k £147k £168k

Please note that these figures are for illustrative purposes only. If you want a clearer idea of how much equity you could release, speak with an expert. They can provide you with a much more accurate calculation.

Speak to an expert for a more accurate calculation.

What is the minimum amount of equity release I can take?

The minimum initial amount for a lifetime mortgage (the most common form of equity release loan) is £10,000 at most lenders, although some set it at £15,000, and a small minority as high as £100,000 for the more prestigious schemes.

To qualify for equity release, most UK mortgage providers would require your property to be worth at least £70,000.

What is the maximum loan-to-value for equity release?

Loan-to-value ratio (LTV) is not a factor mortgage providers base their lending decision on with equity release as the amount you borrow is based on a percentage of your property’s market value, rather than the percentage of it you own.

How much equity do I need to release?

As we’ve already covered, some lenders have a minimum loan amount for equity release. Some lenders set it at £10,000, others at £15,000 and a minority as high as £100,000, if it’s one of the more prestigious schemes you’re applying for.

As for how much you should release, that’s entirely down to your own needs and circumstances.

If you’re unsure, make an enquiry and the expert advisors we work with will go over your application with you and connect you to the right lender.

How do I repay an equity loan?

With equity release, the borrower doesn’t have to make any monthly payments. The loan amount plus the accrued interest is typically settled either when the borrower dies or when they move into long-term care, usually via the sale of the property.

You will, however, have the option to pay all or some of the interest as you go. But if the sale of the property does not raise enough to cover the debt at the end, neither you nor your estate will be liable to make up the shortfall.

Speak to an equity release expert

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

Updated: 4th December 2020
OnlineMortgageAdvisor 2021 ©

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 information 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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