What equity release is — and the safeguards
Equity release lets homeowners aged 55+ access tax-free cash tied up in their property, repaid (with rolled-up interest) when they die or move into long-term care. The best plans carry Equity Release Council safeguards — a no-negative-equity guarantee, the right to remain in your home for life, and the right to move. It must be arranged through a qualified, FCA-regulated adviser, and we'd always involve family.
1. Lump-sum lifetime mortgage
You take a one-off tax-free lump sum secured against your home; interest rolls up over time. Best for a specific large need — clearing a mortgage, home improvements, or helping family. Pros: no monthly payments required. Cons: rolled-up interest grows the debt and reduces your estate.
2. Drawdown lifetime mortgage
You take an initial amount and draw further sums as needed from a reserve. Because interest only accrues on what you've drawn, this usually costs less over time than taking everything upfront. Best for those who want flexible access rather than one big sum.
3. Interest-paying lifetime mortgage
You make voluntary or regular interest payments to slow or stop the debt growing, preserving more of your estate. Best for those with income who want the flexibility of equity release but less interest roll-up.
4. Home reversion
You sell part or all of your home to a provider for a tax-free sum while living there rent-free for life. Less common than lifetime mortgages and you give up a share of ownership. Best only in specific circumstances and after careful advice.
Is equity release right for you?
- Consider alternatives first — downsizing, savings, or a RIO mortgage
- It reduces what you leave behind and can affect means-tested benefits
- Look for Equity Release Council safeguards and inheritance protection
- Always involve family and take qualified advice
How to find the best equity release plan
Equity release is a major, long-term decision, so impartial whole-of-market advice is essential. A qualified adviser will compare lump-sum, drawdown and interest-paying options and confirm whether it's right for you. Find an equity release adviser through Nesto — free, no obligation.
Frequently asked questions
What's the minimum age for equity release?
Usually 55 for a lifetime mortgage; home reversion typically requires you to be older (often 60–65+).
Will I still own my home?
With a lifetime mortgage, yes — you retain ownership. With home reversion you sell part or all to the provider.
Can the debt exceed my home's value?
Not with an Equity Release Council plan — the no-negative-equity guarantee means you'll never owe more than your home sells for.
Does equity release affect my benefits?
It can affect means-tested benefits. A qualified adviser will check the impact before you proceed.
Can I still leave an inheritance?
Yes — many plans offer inheritance protection that ring-fences a portion of your home's value. Drawdown and interest-paying options also help preserve your estate.