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From paying off debts to going on holiday or helping family, people take out equity release for many reasons. Read our guide to equity release criteria and eligibility.
The information on this page should not be considered as financial advice. If you are unsure what’s right for you, please make sure you speak to a financial adviser.
Equity release allows you to access money tied up in your home in the form of a tax-free lump sum or smaller payments or a combination of both.
Equity release eligibility
To be eligible for equity release in the UK, you need to be at least 55 years old and own a property worth at least £70,000.
Here’s a summary of the key criteria you need to meet to be eligible:
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Our equity release calculator can help you understand how much you could release from your home.
The following guide highlights the main factors that lenders consider when working out equity release eligibility.
Why do people release equity from their home?
People choose equity release for a variety of reasons, whether it’s to clear existing debts, fund a big holiday or provide financial support to a loved one.
If you meet the equity release criteria, you could unlock cash from your home without having to move or worry about monthly repayments. You’ll still own your own home, and the money you borrow plus the interest accrued is typically paid back when the property is sold when the last remaining borrower dies or moves into long-term care.
One of the common ways of taking out equity release is through a lifetime mortgage. This allows you to release a percentage of your home’s value as cash while you continue to live in the same property.
Whether you’re looking to boost your retirement income or gift money to a relative, equity release allows you to take your cash as a tax-free lump sum, as smaller payments over an agreed period, or both.
You can obtain an estimate of how much equity you could release from your home using our free equity release calculator.
Below, we cover the key equity release criteria many lenders follow when deciding whether you’re eligible for a plan.
What affects eligibility for equity release?
1. Age
You’ll need to be a minimum age of 55 to qualify for equity release, though some plans are only available to older applicants.
Providers will use the age of the youngest applicant when calculating equity release and how much cash they can lend. If you own your property jointly with a spouse or partner younger than 55, you’ll probably have to wait until you are both over 55 to take out equity release.
2. Property condition
The condition of your home is one of the most important equity release criteria. This is because lenders will seek repayment from the sale of the property when the last borrower dies or moves into long-term care.
Therefore, the condition of your home and its future saleability is a vital consideration for all equity release providers. It must be habitable and in a good state of repair and your lender will instruct a qualified surveyor to inspect the property during the application process. This enables them to work out the property’s market value and satisfies their equity release checklist.
When it comes to equity release, some lenders are more flexible than others. If you’ve been declined equity release you could seek professional pension and retirement advice and explore the options open to you.
3. Location of property
Lenders carefully consider the location of your property and anything else that may affect its resale when applying for equity release. For instance, equity release providers may look at how willing they are to lend you money if you live next to a pub, railway station, busy road, or on a flood plain.
If your property is in mainland England, Scotland, or Wales you’ll have access to a wider range of equity release plans. However, if you live in Northern Ireland your options are limited to just a handful of lenders. Similarly, equity release is available on the Isle of Wight but not on the Isle of Man.
If you’re worried that your access to equity release may be negatively impacted by the location of your property, you should seek financial advice to find out which lenders may be willing to accept your application. Even if you’ve been previously declined equity release, advisers may be able to find you a different lender who will accept the location of your property.
Need help with equity release?
Releasing equity from your home isn’t an easy decision. For a free and impartial chat, speak to one of our friendly advisers.
You can also order a free equity release brochure.
Equity release key considerations
Equity release and lifetime mortgages are not for everyone, and it’s essential that you understand the following key considerations before making a decision:
- You may end up owing more than you borrowed: If your home’s value drops, you could owe more than you borrowed in equity release. Similarly, after interest, you’ll also owe more than you borrowed if you don’t make any payments. However if your product is with a provider that is a member of the Equity Release Council, such as LV=, you will be protected by a No Negative Equity Guarantee so your estate won’t owe more than the property’s value when it is sold.
- You can pass on as inheritance: You can protect some of your home’s value and pass it on as inheritance with some equity release products, however the amount of money you leave loved ones could be reduced.
- You could face early repayment charges: Terminating an equity release contract early could result in early repayment charges.
- You’ll still own your property: You'll continue to own your home throughout the life of the mortgage. When you pass away or the last surviving borrower enters long-term care, the mortgage will need to be repaid.
- You’ll accumulate compound interest: Equity release plans like lifetime mortgages use compound interest. You won’t be required to make monthly repayments, but interest will accumulate on the amount you owe the lender.
- You can still move to another property: Some equity release plans give you the right to move to another property without having to pay early repayment fees and charges.
- Less access to means-tested benefits: Equity release such as a lifetime mortgage could negatively impact your entitlement to means-tested benefits.
- You can make some overpayments: Over the term of the mortgage, you can make some overpayments without penalty. However, early repayment charges may apply if you decide to repay the mortgage in full. This doesn’t apply if you pass away, or the last surviving borrower moves into long-term care.
Equity release eligibility criteria FAQs
We’ve put together some frequently asked questions around the topic of equity release to help you get started.
What is the maximum amount I can borrow in equity release?
The maximum amount of money you can borrow in equity release depends on your age, health, and the value of your property. You can usually release between 20% and 60% of your home’s value.
Some lenders put a maximum limit on what they can lend. Also, loans over £2 million are generally left to the discretion of the lender regarding the amount they’re willing to release in equity.
What about the minimum amount?
The minimum you can release as a first lump sum is usually £10,000 with most lenders. If you choose a product that allows you to access equity with more flexibility like a lifetime mortgage drawdown, each payment must usually be at least £2,000.
Meanwhile, some equity release plans have a higher minimum threshold which is often linked to a lower interest rate than other options.
Does equity release cover all types of property?
Equity release is available on most standard construction properties built from brick, stone, pitched roof tiles, and other common materials. These include detached, semi-detached, and terraced houses as well as bungalows, flats, and apartments.
More recently, certain lenders have become less strict over the type of properties that qualify for equity release such as homes with an annexe, flat-roofed properties, and those connected to commercial and business activity.
What properties may not meet equity release criteria?
Getting equity release on some types of property can prove more difficult in certain circumstances. These include:
- Pre-1965 timber-framed buildings
- Prefabricated buildings
- Metal-framed buildings
- Buildings with a thatched roof
- Grade I and II listed buildings in England
- Retirement properties
- Properties with more than 7 bedrooms
- Homes with restricted leases
- Homes built on floodplains
- Some concrete buildings
- Mobile/park homes and caravans
- Coastal homes with erosion issues
- Homes near certain commercial settings
Securing equity release on many of these properties will mostly depend on the type of building and the age of the construction. Again, some lenders will be more willing to offer a release plan for this type of construction than others, but it may affect the amount you can borrow and the interest rate you will pay.
Is equity release available on leasehold properties?
Yes, equity release is available on leasehold properties on the condition that the remaining length of the lease meets the lender’s underwriting criteria. For example, some lenders will ask for at least 160 years remaining on the lease minus the youngest applicant’s age.
If you live in a leasehold property and don’t have sufficient lease length, you may be able to extend the lease when you apply for equity release. This may lengthen the time of the application process, and you may need to pay for additional upfront costs.
What about equity release on former local authority homes?
Yes, you can get equity release on ex-local authority properties. However, lenders will consider the percentage of local authority-owned homes in the area when you apply.
If you live in a former local authority flat, the minimum acceptable property value is often at least £200,000. If you live in a leasehold property where the freeholder is the local authority, the lender may insist you purchase the freehold first in order to secure equity release.
Is a good credit score part of the equity release criteria?
No, a good credit score is not part of the equity release criteria, on products where repayments are not required. This is because you don’t typically need to make payments during the term of your plan, and the money you’ve borrowed plus the interest will come out of the sale of the property when the last borrower dies or moves into long-term care. There are some lifetime mortgage products available which include a mandatory repayment feature and these would require a good credit score.
Certain lenders may insist that you clear any County Court Judgments or IVAs which can be settled using the equity release funds. However, if you are in an undischarged bankruptcy, you won’t be able to take out equity release until you’ve been discharged.
What qualifications do equity release advisers need in the UK?
The adviser recommending the product must hold an FCA-approved equity release qualification and work for a firm authorised by the Financial Conduct Authority (FCA).
This ensures the advice you receive meets regulatory standards and that the adviser understands how equity release products work.
Common qualifications held by equity release advisers include:
- Certificate in Regulated Equity Release (CeRER) – awarded by the London Institute of Banking & Finance (LIBF).
- CII Certificate in Equity Release (ER1 / ER3 units) – awarded by the Chartered Insurance Institute (CII).
- CeMAP (Certificate in Mortgage Advice and Practice) – a mortgage advice qualification usually required before specialising in equity release.
For homeowners, eligibility is based on factors like age, property value and remaining mortgage balance, rather than qualifications.
What are the alternatives to equity release?
Equity release may not be right for everyone, and some alternatives may be better suited to your personal circumstances. For example, downsizing to a less expensive property, remortgaging with a standard mortgage, or using other savings and investments to boost your retirement income are common choices that people often make.
Why would I not be eligible for equity release?
You may not be eligible for equity release if you are under the minimum age of 55, or if your property doesn’t meet the lender’s criteria. Applicants must have been resident in the UK for a minimum of the last 3 years to confirm residency and credit history. If you have an outstanding mortgage or secured loan that can’t be repaid from the equity release, or financial issues such as bankruptcy, your application could be declined.
Unsure if you meet all the equity release criteria?
If you’re aged 55 or over, equity release is an easy way of unlocking cash tied up in your property. To find out if you qualify, visit our equity release advice service or contact us today.
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