We’ve teamed up with Age Partnership, one of the UK’s leading equity release advisers to help ensure you find the right loan. See how much equity release you could access by using the Age Partnership calculator below.
How much equity can I release from my home?
Generally speaking, borrowers can release anywhere from 20–60% of the equity they own in their home. However, the amount of equity you’ll be able to release will depend on a number of factors, including:
- Your age and personal circumstances
- The value of your home
- If you still have a mortgage
- Your lender’s terms
How much you can borrow with equity release is also limited by what’s known as the loan-to-value (LTV) ratio. This is calculated by dividing the value of your property by the size of your loan. For example, if you want to borrow £50,000 on a house worth £250,000, your LTV ratio would be 20%. Most lenders will have a set LTV limit, which can also limit how much equity you can release in your home.
What is the maximum percentage of equity that you can borrow with equity release?
This will depend on things like your age, the value of your property and your specific lender, but you may be able to release up to 60% of the equity you own in your home. You’ll generally be able to release as little as 10% of your equity.
The older you are, the more equity you’ll likely be able to access, which means a 55-year-old borrower may only be able to release 25% of the equity, whereas an 80-year-old may be able to access 50%.
Why use an online equity release calculator?
An equity release calculator can help give you a clear overview of your borrowing options, including the minimum and maximum amounts you’ll be able to borrow. You’ll also be able to see how much the loan is likely to cost and get a better understanding of the different types of equity release loans on offer.
How to use our free equity release calculator: Step-by-step guide
- Enter the estimated value of your property.
- Enter the age of the youngest homeowner.
- Enter the value of any outstanding mortgage.
- Provide your email address to receive your results and offers.
- Click “Calculate in seconds”.
- Add your name, number and address.
- Click “Calculate now” to see how much you could borrow with equity release.
What information do I need to provide to use an equity release calculator?
When using an equity release calculator, you’ll need to provide the following details:
- Your age (or the age of the youngest applicant)
- The value of your property
- The type of property
- Your outstanding mortgage balance (if applicable)
- Any other charges outstanding on your home
Calculator results explained
When you use our equity release calculator, you’ll be given an estimate of the amounts of equity you could release from your home. For example, if your results say you could release between £10,000 and £60,000, this means you may be able to take out an equity release loan for an amount within that range.
How much does equity release cost?
When you take out an equity release loan, you may need to pay the following fees:
- Lender or broker fee
- Valuation fee
- Legal and solicitor’s fees
Like any other loan, you’ll also be charged interest on the amount of equity you release. The interest you pay will vary based on the size of your loan, as well as the specific rate you’re offered. Different types of equity release also have different repayment terms, with some requiring you to make regular monthly interest payments and others requiring you to pay off the entire interest accrued at the end of the loan.
How is equity release interest calculated?
Interest on equity release loans is generally accrued daily and then added to the loan on a monthly basis, which is expressed as the monthly equivalent rates (MEV). However, most lenders will provide the annual equivalent rate (AER), which is the rate at which interest accrues each year.
What is the typical interest rate on equity release?
Equity release loans are generally offered with rates from 2–6%, but the specific rate you receive will depend on your personal situation, the value of your property, the size of your loan and your lender. Loans with lower LTV ratios will typically receive lower interest rates and loans with higher LTVs will receive higher rates.
How do I calculate equity release repayments?
This will depend on the type of equity release loan you take out:
Lump sum equity release. With a lump sum lifetime mortgage, you won’t need to make any repayments until the end of the loan. While interest will begin accruing on the full equity amount upfront, it will only need to be repaid once the loan term finishes.
Drawdown equity release. Like a lump sum equity release, a drawdown lifetime mortgage has no repayments during the life of the loan. Interest begins accruing on any equity amounts you release, but is not repaid until the loan ends.
Interest-only equity release. Interest-only lifetime mortgages require you to make monthly interest payments, which will be calculated based on the size of your loan and your interest rate.
Will I be taxed on the equity I release from my home?
No, you will not pay any tax on the amount you receive from an equity release loan. However, taking out an equity release loan can have an impact on any means-tested benefits you receive and will also affect the value of your estate.
Will equity release affect my entitlement to means tested benefits?
Yes, taking out an equity release loan can affect your entitlement to means-tested benefits, such as your pension, housing benefit or council tax support. Before applying for an equity release loan, you should always talk to an expert who can explain the implications of equity release on your benefits.
Frequently asked questions
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