An Essential Guide To Determining Whether Equity Release Is Right For You

Are you wondering about equity release? This quick guide will help you decide which one is best for you.

There are many aspects of equity release, but you have to find a suitable one. Equity release with mortgage contracts is easy to navigate with the right help. Let’s look at some of the guidelines for obtaining equity release. 

What’s Equity Release?

An equity release is a loan you take against the value of your home without selling it. You need to be over the age of 55, and your home has to be valued at £70,000.

Hands using a calculator on desk surrounded by equity release paperwork.

What Are the Criteria for Equity Release?

You need to be 55 years and older to qualify for an equity release of 20 – 50% of the market value of your home. Couples need to be 65 to qualify. 

You need to be a permanent UK resident, and you need to have a minimum of 6 months left on the outstanding balance of your mortgage. 

You need to have a good credit score. The application is the same as the first mortgage.

If you want to qualify the second time, you need a good rating. 

Is Equity Release Right for You?

If you have plans to renovate your home, are in long need of a vacation, or have children who may need financial assistance, then this is for you. 

Anyone eligible and able to replay the monthly fees on time will find equity release less stressful than a regular loan. You can conveniently plan with an equity release plan that suits your lifestyle. 

Equity release makes retirement easier. Knowing that you don’t have anything to worry about when your retirement fund runs out can give you the freedom to enjoy your retirement.

If the company or business you are retiring from doesn’t have a compensation or retirement plan, it could make life difficult once you complete your service. 

Equity release can ease those worries, and you don’t even have to sell your home or move out of it according to John Lawson, an equity release expert.

Different Types of Equity Release

There are two different types of equity releases. The one you choose would depend simply on whether you want to sell or keep your home. You can choose between a lifetime mortgage or home reversion. 

Home reversions are when you sell a percentage of your home to the lender. The house will be sold when you die, and the lender will take their portion before your children inherit anything. 

Lifetime mortgages are the most popular. Your home is evaluated, and a lender can pay a percentage to you in a lump sum or instalments. 

You do not have to sell and have the option of repaying before the loan period is meant to end. 

Older couple on sofa smiling about their lifestime mortgage and equity release decision.

What’s The Criteria For Equity Release? 

Besides being the right age, you also need to ensure that your credit score is good. Any loose credit will need to be tied up before you apply. 

The application process is the same as applying for your first mortgage, and there are no guarantees that you will get it the second time. 

You will need to have the following documents.

  • ID
  • Proof of permanent employment
  • Evidence of a good credit record 

Your home needs to be in your name, and you need to be a permanent resident of the UK. If you are applying for joint equity release, you or your partner needs to be a resident of the UK. 

You also have to be living in the house. 


Equity release can start from as little as £10,000, and with the ERC laws, you can repay the loan before the period is over. You may be charged a penalty, but you will be able to reapply for a new mortgage when you are done. 

There is no better time to look into equity release. Just make sure that you have all the information before you apply. 

This is a collaborative post

Last Updated on 14th June 2022 by Emma

About Emma

I'm here to help you become confident in making the best money decisions for you and your family. Frugal living has changed my life, let me help you change yours.

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