Equity Release Calculator
Estimate how much equity you could release from your property and understand the long-term cost — including how interest compounds over time and the impact on inheritance.
Equity Release Guide
How Lifetime Mortgages Work
A lifetime mortgage is a loan secured against your home that does not require monthly repayments. Interest accrues and compounds annually, rolled into the growing loan balance. The loan plus all accumulated interest is repaid when you die or move into long-term care (by selling the property). Equity release providers must be members of the Equity Release Council, which requires: a no-negative-equity guarantee (you will never owe more than the property is worth), the right to remain in the proper
How Much Can You Release?
The maximum loan-to-value varies primarily with age — older applicants can release a higher percentage because the expected loan term is shorter. Typical LTV by age: 55 years (20-25%), 60 years (25-30%), 65 years (30-35%), 70 years (35-45%), 75 years (40-50%), 80+ years (50-60%). Property condition and minimum values also affect eligibility — most lenders require a minimum property value of £70,000-100,000. Enhanced terms are available for people with certain medical conditions (shorter life exp
The Compound Interest Problem
At 5.8% interest with no repayments, a £100,000 loan doubles in approximately 12 years. After 20 years it reaches approximately £308,000. This is the fundamental financial concern with equity release: compound interest erodes estate value rapidly. Making even small regular repayments (many plans allow penalty-free repayments of up to 10% of the original loan per year) dramatically reduces the final balance. An interest-only payment stops the balance growing entirely. Always model the long-term b
Alternatives to Equity Release
Before proceeding with equity release, consider: downsizing (selling and moving to a smaller property — often releases significant equity while eliminating ongoing loan interest), benefits check (many older homeowners are entitled to unclaimed benefits — Pension Credit, Council Tax Reduction, Attendance Allowance — check at entitledto.co.uk), remortgage (if you still have income, a conventional mortgage at lower rates), interest-only retirement mortgage (repayment from sale or estate, lower rate
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