Find the best equity release rates

If you've decided to release some of the equity in your home, we explain how to find the best providers and rates.

In collaboration with Age Partnership

Find the best equity release rates

Table: sorted by the lowest AER from each brand included.
Name Product Product type Rate type Maximum LTV Monthly rate Annual rate (AER)
Sovereign Lump Sum A
Lump sum
Fixed
9.5%
2.34%
2.37%
Lifestyle Lite (Flexible)
Drawdown
Fixed
26%
2.44%
2.47%
Capital Choice Ultra Lite Lump Sum
Lump sum
Fixed
9.5%
2.47%
2.5%
Optional Payment Black Lifetime Mortgage
Interest only
Fixed
26%
2.49%
2.52%
Scottish Widows LS1
Lump sum
Fixed
28%
2.54%
2.57%
Interest Payment Roll-Up Lite Variable
Interest only
Variable
29.5%
2.8%
2.84%
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Compare up to 4 providers

We work with Age Partnership, one of the UK’s leading equity release specialists, which scours more than 500 deals to find the best equity release products. We compare only lifetime mortgages, and do not compare any home reversion plans. To understand the features and risks of lifetime mortgages, ask for a personalised illustration from a lifetime mortgage company. Check that this type of mortgage is suitable for your needs if you plan to move or sell your home or you want your family to inherit it. If you're not certain, seek independent advice. Your home may be repossessed if you do not keep up repayments on your mortgage.

Equity release is a way for over-55s to release some of the value of their home while they are still living in it. The cash is tax-free and only repayable when the property is sold, after the homeowner dies or moves into permanent care.

Equity release is growing in popularity in the UK, but it’s important to consider the pros and cons of this route, which we explore fully in our equity release guide. If it’s something you’ve decided to opt for, we take a look here at how you can go about finding the best provider.

Equity release jargon explained

  • Annual rate (AER). Also known as the annual equivalent rate, the AER is the amount of interest that is charged on the loan each year.
  • Maximum LTV. The loan-to-value ratio is the maximum percentage of the property value that you can access.
  • Monthly rate. This is a percentage figure of the amount of interest you’ll be charged each month of the loan.
  • Rate type. Equity release loans are offered with either fixed or variable. Fixed rates stay the same over time, while variable rates can go up and down in line with wider market rates.

How do I find the best equity release provider?

First off, if you’re certain about pursuing equity release, you’ll need to decide what type of equity release plan you’d like to for.

These are the main equity release options (with links to our guides so you can research them more):

Once you’ve decided what type of plan you think will best meet your needs, you can start searching for providers which offer that type of equity release.

Many providers publish their plans and rates online, and you can use tables like our one above to do side-by-side comparisons.

Whichever provider you opt for, it’s strongly recommended to choose one that is a member of the Equity Release Council. Products offered by these companies have a “no negative equity guarantee”, which means you (or your beneficiaries) will not end up owing more than the house is worth when it comes to selling it. If the equity release product involves a variable rate of interest, this will also be required to have an upper limit.

If you’d like more assistance in looking for equity release deals, it might be an idea to speak to a specialist broker, who can search the market to identify providers and plans that best meet your circumstances.

How do I find the best equity release rate?

The rate you’re offered will depend on:

  • Age. Homeowners must be at least 55, and where there are two people on the property deed, the youngest person’s age is primarily taken into account.
  • Your health. Some providers will take medical conditions into consideration.
  • House value. Your property will need to be worth a minimum of £70,000.
  • Portion of equity you’re releasing. Plans typically involve releasing a maximum of 60% of the home’s value, although providers will also have different minimum thresholds.

To find the best rates, it’s advisable to check out some comparisons of the current plans available on the market that fit your individual needs and assessment criteria. Our table below is regularly updated with live market rates.

As mentioned above, you might prefer to speak to a specialist equity release broker who can search through a variety of plans and rates that would be available to you.

How do I know what a good equity release rate looks like?

As the rates you’re offered will depend on your age, house value and portion of equity you’re releasing, it worth comparing offers from several providers to see what “good” looks like for your own particular set of circumstances.

Take into account that some types of equity release, such as lump-sum lifetime mortgages, typically involve a fixed rate of interest from the time you receive the funds as a one-off payment. Other types of plan may have a variable rate of interest, or a drawdown lifetime mortgage – where you take out cash in stages – will typically be subject to a different interest rate every time you make a drawdown.

In general, the fixed interest rates on equity release plans are usually higher than the interest rates you’ll see offered on traditional residential mortgages.

Also be mindful that as with traditional mortgages, some plans come with a one-off product fee, which is in addition to the interest you’ll pay. So you’ll have to factor this in when assessing which plan will work out the cheapest for you.

The other thing to watch out for is early repayment penalties, should you decide to pay back your equity release loan at any point. However, your plan might come with the option of making some partial interest repayments as you go along.

Given that equity please can have a long-term impact on your finances and what you leave as an inheritance, it’s worth considering speaking to independent financial advisor before you make a final decision on the best option for you.

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