Equity Release - How Much Could I Receive?

How much can you actually get from an equity release scheme?

Equity release is seen by many people as an attractive solution to the problem of needing to raise money in retirement without having to sell the family home. 

There are two main factors that equity release providers will look at when they work out how much they can offer customers: how much their property is worth, and how long they are likely to live for after taking out the plan.

The latter is based on their age (and that of their spouse in the case of joint applications) and their current state of health. 

So the younger someone is when they take out equity release, the less money they will be able to raise, other things being equal.

The most common type of equity release scheme is known as a lifetime mortgage. 

This involves you borrowing a certain sum against the value of your home, with the capital plus interest only liable to be repaid when you die or move into long-term care.

Each equity release provider will set a limit for how much you can borrow expressed as a percentage of your home’s value. 

Younger customers – you normally need to be 55 or older to take out a plan – can expect to borrow significantly less than half what their home is worth, while older people or those with serious health issues might be able to borrow as much as 60%.

On a home valued at £300,000, the maximum amount that could be released could vary from £100,000 or less to around £180,000 – but of course customers can take lower amounts if they want.