Equity release calculator

A quick overview of equity release.

Equity release is a way for homeowners to access the value in their property while continuing to live in it. There are two types of equity release products available, each with its own features and benefits. Here is an overview of the most common types:

Lifetime Mortgage

A lifetime mortgage is a loan secured against your property. Interest is charged on the amount borrowed, but it is not usually repaid until the property is sold or the homeowner dies. This type of equity release product offers flexibility, as homeowners can borrow as much or as little as they need, and there are no monthly repayments.

Home Reversion

Home reversion is a way to sell a portion of your property to a provider in exchange for a lump sum or regular payments. The homeowner retains the right to live in the property until they die or move out. This type of equity release product offers certainty, as the amount of money received is agreed upon at the outset.

The benefits of equity release include the ability to access the value of your property without having to move, the flexibility to borrow as much or as little as you need, and the ability to receive a lump sum or regular payments to supplement your retirement income.

Here’s an example of what you can use equity release for.

One potential use for equity release is to pay off debts. For example, if you have outstanding credit card balances, personal loans, or other high-interest debt, equity release can provide you with a lump sum of money that can be used to pay off those debts.

This can help you reduce your monthly payments and get your finances back on track.

However, equity release also comes with some potential risks and drawbacks that should be carefully considered.

One risk is the impact on inheritance. If you release equity from your property, the amount that can be passed on to your heirs will be reduced.

Additionally, equity release comes with interest rates that can add up over time, meaning you could end up owing more than the value of your property.

It’s important to carefully consider these risks before deciding whether equity release is the right option for you.

Are you eligible for equity release?

Before using our equity release calculator, it’s important to make sure you’re eligible. To qualify for equity release, you (or the youngest homeowner) must be aged 55 or over, your home must be worth at least £75,000, and it must be your main residence in the UK (excluding the Channel Islands and Isle of Man).

Why use an equity release calculator?

It’s a good idea to use an equity release calculator to get an idea of how much you could potentially release and what the costs might be.

Our free equity release calculator is a great place to start. It helps you see roughly how much money you could release to help you secure the best equity release deal.

Our calculator is designed to be simple and straightforward, with no need to enter personal details. Simply enter your age and the value of your property, and our calculator will estimate the maximum loan available.

Keep in mind that this is just an average figure and it’s important to note that the maximum amount you can release depends on several factors, including your age, the value of your property, and your health and lifestyle.

Our equity release calculator cannot take these factors into account.

Why we don’t need your personal details to use our calculator

One of the best things about our equity release calculator is that you don’t need to enter any of your personal details to use it.

You can remain completely anonymous and won’t receive any calls or spam emails from us.

This is particularly important for those who are concerned about privacy and don’t want to share their personal information online when using other data-collecting equity release calculators.

We are not trying to get you to fill out a form for the purpose of contacting you.

Our free equity release calculator is a tool you can use as many times as you like.

How does our equity release calculator work?

When calculating the maximum loan available, lenders will require the age of the youngest homeowner and the property value. The maximum amount you could potentially release at the age of 55 is 20.5% of the value of your property.

Generally, you can release an extra 1% of the equity with every year older you are, up to a potential maximum of 52%.

What percentage can you get on equity release?

Your age affects the percentage an equity release provider could lend on your property and represents a Loan To Value (LTV) rate, which is the maximum percentage somebody of your age can release.

Why does your age have an impact?

The younger you are, the longer you are likely to live, therefore the loan will take longer to pay back.

Why does your health have an impact?

Your health and lifestyle can also impact the maximum amount you can release. With medically enhanced equity release plans, the provider takes into consideration your overall health and lifestyle, and you could potentially receive more money.

Our equity release calculator automatically shows you roughly how much extra money you could get if you qualify for medically enhanced rates.

Case Study

Meet John and Mary, a retired couple living in a house worth £300,000. They are both over 65 and have been struggling to keep up with their monthly expenses since retiring.

They have a mortgage and some credit card debts, and they worry about how they will continue to pay for their daily expenses without dipping into their savings.

One day, they come across an article about equity release and decide to try out an equity release calculator to see if it could help them.

They enter their age and the value of their property into the calculator and find out that they could potentially release up to £120,000 with a lifetime mortgage.

This amount is enough to pay off their outstanding debts, and their mortgage, and still have some money left over to fund their daily expenses.

John and Mary then decide to speak with an Equity Release Council-approved adviser to get more information and guidance on the best product for their situation.

The adviser recommends a lifetime mortgage with a fixed interest rate, which means they can plan their finances with more certainty.

With the equity release plan in place, John and Mary are able to pay off their debts, reduce their monthly expenses, and enjoy their retirement without worrying about money all the time. They also have peace of mind knowing that they can remain in their home for the rest of their lives.

Overall, equity release has been a great solution for John and Mary’s financial needs, and they are happy they decided to explore this option with the help of an equity release calculator and a professional adviser.

How much does equity release cost?

According to Martin Lewis at Money Saving Expert &, the average cost to set up equity release is between £1,500 and £3,000. You can read more about what Martin Lewis thinks about equity release on his website. If you want to find out more about equity release rates we have written a full report on it.

Wherever you live in the UK, whether you’re looking for equity release in Yorkshire or Manchester, an Equity Release Council-approved adviser can help you choose the right product for you, and we highly recommend that you do seek professional advice before you proceed.