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If you are an older home owner you might have been wondering how much of the equity locked up in your property could be released. An equity release calculator is a useful way to find out a rough estimate of how much you equity you might be able to release from your home. However the actual amount a lender will be willing to let you release will be affected by other factors than just your home’s value such as:

  • How old you are at time of application.
  • If you want a single or a joint plan.
  • How much you want to leave behind to the beneficiaries in your will.

What type of equity release plan

You need to decide what plan would best suit your needs. There are two key types of plan you can use to release equity:

Lifetime mortgage

A lifetime mortgage is a loan secured against your house for a percentage of its worth. You don’t however have to make monthly interest repayments on the loan unless you choose to in some plans. instead the loan and any interest that accumulates on it are repaid through the sale of your house when you die or move into long-term care until this point your home remains your property. Money left over once the debt has been paid off can be passed on to your loved ones.

If the market value of your house falls and becomes less than the amount you borrowed, known as going into negative equity, in some cases your beneficiaries may have to pay any debt you leave. However most lenders provide a - No Negative Equity Guarantee - this guarantee means they ensure you will never have to repay anymore than the sale price of your home, even if it is much less than the amount you borrowed.

Home reversion

A home reversion scheme you sell your home or a portion of it to a home reversion company for less than its market value for a lump sum payment or to receive a regular income to supplement your pension, you are also guaranteed the right to continue living in your home for either free or at a reduced rate of rent until you die or move in to long-term care.

Is equity release right for you?

Equity release is a long term commitment and it will reduce the size of your estate. Equity release plans whether a lifetime mortgage or home reversion vary greatly from lender to lender so it is wise to consider all of your different options before making a decision. To find out more about the different types of equity release and if one of them is right for you, simply click on the link and fill in the quick form and an equity release specialist will get back to you with free, no obligation quotes and advice.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Equity release may affect your entitlement to state benefits and will reduce the value of your estate. It may involve a lifetime mortgage or home reversion plan. All content set out in this website is provided for information only and should not be considered as advice. It is strongly recommended that you seek advice of a qualified, independent financial advisor before making any decisions to take out an equity release product.