If you’re over 55 and own your home in the UK, you might be sitting on thousands of pounds of untapped value. An equity release mortgage allows you to unlock the cash tied up in your property — tax-free — while still living in your home.
Whether you’re looking to top up your retirement income, help family members, or fund home improvements, equity release can be a flexible solution. But it’s not for everyone. This guide covers everything you need to know in 2025 about equity release mortgages for over 55s in the UK.
What Is Equity Release?
Equity release is a financial product that allows older homeowners (typically 55+) to access a portion of their property’s value without selling up. You receive the money either as a lump sum, regular income, or both — and you don’t need to make monthly repayments unless you choose to.
The loan is repaid when you die or move into long-term care, usually from the sale of your home.
Types of Equity Release Mortgages
1. Lifetime Mortgage (Most Common)
- You borrow a percentage of your home’s value.
- Interest rolls up (compounds) unless you choose to pay it off monthly.
- You retain full ownership of your home.
2. Home Reversion Plan
- You sell all or part of your home to a provider in exchange for cash and a lifetime lease.
- You no longer fully own your home.
Most people opt for lifetime mortgages due to their flexibility and control.
Who Is Eligible for Equity Release?
To qualify for equity release in the UK, you generally must:
- Be aged 55 or over (some providers start at 60+)
- Own a home in the UK worth at least £70,000–£100,000
- Use the property as your main residence
- Have little or no mortgage left on the property
How Much Can You Borrow?
The amount you can release depends on:
- Your age (older applicants can borrow more)
- The value of your property
- Your health (some plans offer enhanced terms for certain conditions)
Example: A 65-year-old with a £300,000 home could access £90,000–£120,000, depending on the lender and product.
How Is the Money Paid?
You can choose:
- Lump sum: One-time payout for big expenses (e.g., renovations)
- Drawdown facility: Withdraw smaller amounts when needed, which helps reduce interest costs
- Monthly income: Useful for supplementing pensions
Pros and Cons of Equity Release
✅ Advantages:
- Tax-free cash without moving home
- Stay in your property for life
- Flexible use of funds (gifting, debt repayment, holidays, etc.)
- No monthly repayments required
- Some plans allow voluntary interest payments
❌ Disadvantages:
- Reduces the value of your estate
- Compound interest can grow the loan significantly over time
- Early repayment charges may apply
- May impact state benefits or care funding eligibility
Equity Release and Inheritance
Most lenders offer inheritance protection guarantees, allowing you to ring-fence a portion of your home’s value. But overall, equity release will reduce the amount you leave behind to your loved ones.
If you’re planning to pass down your home, it’s crucial to involve family in the decision-making process.
Is Equity Release Safe?
Yes — as long as you use a provider regulated by the Financial Conduct Authority (FCA) and a member of the Equity Release Council (ERC). These bodies enforce customer protections such as:
- No negative equity guarantee (you’ll never owe more than your home’s value)
- Right to remain in your home for life
- Independent legal advice is required before signing
Things to Consider Before You Apply
- Have you explored alternatives like downsizing, remortgaging, or help from family?
- Are you eligible for state benefits that could help financially?
- How will equity release affect your long-term financial goals?
Always speak to a qualified equity release advisor who can compare products across the whole market and explain your options clearly.
Top Equity Release Providers in the UK (2025)
- Legal & General
- Wide range of lifetime mortgages
- Flexible drawdown features
- Aviva
- Enhanced lifetime mortgage options
- Competitive rates for older applicants
- Canada Life
- Tailored options for high-value homes
- Fixed early repayment charges
- More2Life
- Specialist equity release lender
- Known for drawdown and interest payment flexibility
- LV=
- Strong customer service
- Clear inheritance protection plans
Final Thoughts
Equity release can be a powerful tool for homeowners over 55 in the UK, especially as living costs rise and pensions stretch thin. But it’s not a decision to rush. The impact on inheritance, benefits, and future financial needs must be weighed carefully.
If you’re considering an equity release mortgage, speak to a whole-of-market equity release adviser and involve your family in the discussion. Make sure your chosen provider is ERC-approved for peace of mind.