Funding improvements in later life
Adapting or improving your home in retirement — a new kitchen, accessibility changes, or general modernisation — can be funded several ways. The best option depends on whether you want monthly payments, how much you need, and your income.
1. Drawdown lifetime mortgage
Release funds as you need them for a phased project, with interest only accruing on what you've drawn. Best for over-55s funding improvements over time with no monthly payments. Cheaper over time than a single lump sum.
2. Lump-sum lifetime mortgage
A one-off tax-free sum for a single large project. Best when you need the full amount upfront — but interest rolls up on the whole sum, so only borrow what you need.
3. Retirement interest-only (RIO) mortgage
Borrow for the improvements and pay only the interest monthly, so the debt doesn't grow. Best for those with income who want to preserve their estate.
4. Remortgaging or a further advance
If you still have mortgage affordability, releasing equity this way is usually cheapest. Best for younger retirees or those with strong pension income.
5. Savings or a personal loan
For smaller projects, using savings avoids interest entirely, and a short personal loan may be cheaper than securing debt against your home. Best for modest improvements.
Which is best?
- Phased project, no monthly payments: drawdown lifetime mortgage
- One large project, no monthly payments: lump-sum lifetime mortgage
- Income to pay interest: RIO mortgage or remortgage
- Small project: savings or a personal loan
How to find the best route
A qualified adviser will compare equity release against the alternatives so you fund your improvements the smartest way. Find an equity release adviser through Nesto — free, no obligation.
Frequently asked questions
Can I use equity release for home improvements?
Yes — it's a common use. Drawdown plans suit phased projects; lump sums suit single large jobs.
Is equity release the cheapest way to fund improvements?
Not usually — remortgaging or savings are cheaper if available. Equity release suits those wanting no monthly payments.
Will it reduce my inheritance?
Yes — rolled-up interest reduces your estate. Drawdown, interest-paying options and inheritance protection can limit the impact.
Do I need advice for equity release?
Yes — it must be arranged through a qualified, FCA-regulated adviser, and involving family is recommended.
What if I only need a small amount?
For small projects, savings or a short personal loan are often better than securing debt against your home.