What is equity release?

Equity release is aimed at homeowners aged 55 and over. It allows you to take some of the value of your home as cash.
 
  • The amount you can release is based on your age and the value of your home.
  • The cash released is tax-free.
 
Depending on the product you choose, you can receive the money as a lump sum or series of lump sums. The loan doesn't need to be paid back until the last surviving borrower dies or moves out of the home and into long-term care.
 
Some of the common reasons people release equity include paying off existing loans, gifting money to family or making home improvements.
 
 

What are the maximum and minimum ages for equity release?

The minimum age for equity release is usually 55, though this will differ from provider to provider. If it's a joint application, the youngest applicant should be 55 or over.

There is no maximum age for equity release, but some providers may set their own upper limits.

 

Types of equity release

You can choose between two different types of equity release:
 
  • Lifetime mortgage: A lifetime mortgage is a loan secured against your home. You continue to own your home. 
  • Home reversion scheme: With a home reversion scheme, you sell all or part of your property for less than the market value. You continue to stay in your home as a tenant. 
 
Whichever form of home equity release you choose, you continue to live in your home until the last surviving borrower dies or moves out of the home and into long-term care. A financial adviser will help you understand if equity release is right for you and which product best suits your needs. There may be cheaper ways to borrow money.
 
At Legal & General, we only offer lifetime mortgages.
 
 

Key information on equity release: how does equity release work?

Your financial adviser will help choose the right product and provider, and can help explain equity release. Each journey is different but here is the process you can expect to follow when releasing equity from your home; from getting equity release advice to receiving the money.

Step 1: Get advice

The first step is to speak to a financial adviser who is qualified to offer advice on equity release products.

Your adviser will check if you're eligible and take the time to understand your needs and whether equity release is right for you.

Based on the information your adviser gathers, they'll pull together a recommendation for you. Make sure you take the time to discuss the recommendation with your adviser, so you fully understand the product.

Step 2: Valuation and offer

If you are happy with the recommendation, your adviser will help you submit your application to the lender.

At this point, you should appoint a solicitor who specialises in equity release to act on your behalf and offer independent legal advice.

The lender will arrange a valuation of your home. Once this is complete and the application approved, the lender will send an offer to your solicitor. You should take the time here to discuss the offer with your solicitor.

Step 3: Receiving the money and repayments

If you're happy with the offer, the money will be released to your solicitor who will repay any existing debt against the home before releasing the money to you.

Once any existing debt on the home is paid off, the remaining money is yours to spend how you want.

You'll receive the money however you agreed with the lender.

The loan is usually paid off from the proceeds from the sale of your home.

How do I repay a lifetime mortgage?

Of the two types of equity release, Legal & General only offer Lifetime Mortgages. A lifetime mortgage doesn't have a set repayment date and you don't have to repay any of the money you borrow, or any of the interest, until:
  • you die; or
  • move permanently out of the home and into long-term care. Find out more about care and equity release.
 
If the lifetime mortgage is in joint names, nothing is repaid until the last person dies or moves permanently out of the home and into long-term care. The loan is usually repaid through the sale of your home.
 
You can also choose to repay some of the money you borrowed. This will reduce how much you owe. Depending on which product you take out, you can choose to pay some, none or all of the interest.
  • Optional repayments: You can choose to make partial repayments to manage the amount owed on the loan and interest. Subject to Terms and Conditions.
  • Make monthly interest payments: You can pay some or all of the monthly interest to reduce the overall cost of the loan.
  • Pay back the full loan and interest: It is possible to pay back the full amount but if you do, you may have to pay an Early Repayment Charge, which could be substantial.
 
There are limits on how much you can repay and how often you can make repayments. A financial adviser will help you find the right product for you.
 
 

How do I apply for equity release?

Choosing equity release is a big decision. For that reason, you can only apply for equity release through a qualified financial adviser. Your adviser will help you understand the options available and decide whether equity release is the right choice for you. They will also work with you to find the right provider.
 
We offer equity release advice. If you'd like to speak to one of our specialist team about your options, call the number at the bottom of this page, or request a callback.

Are you thinking about downsizing?

Equity release might be a better option for you. Learn more about the differences with our in-depth comparison between downsizing and equity release.

Women on the phone

Get equity release advice

Our equity release specialists are waiting to answer your questions about equity release.

For any other enquiries please get in touch via our contact us page

0808 301 70440808 301 7044

Monday to Sunday 8:30am - 8:00pm
We may record and monitor calls.

More about later life mortgages

Compare later life mortgages

Which later life mortgage is right for you?

Lifetime Mortgages (a type of equity release) and Retirement Interest Only Mortgages are sometimes grouped together as 'later life mortgages' or 'later life lending' products. While similar and often used for similar purposes, these are different products and it's important to understand the differences between the two. There may be cheaper ways for you to borrow money.

Find out more about our range of later life mortgages, or use our simple tool to find out which product might best suit your needs.

Compare later life mortgages Which later life mortgage?

Retirement Interest Only Mortgage

A type of residential mortgage.

A Retirement Interest Only mortgage is a loan secured against your home. You have to pay the interest off monthly, but the full amount of the loan isn't usually repaid until you die or move out of the home into long-term care. As a last resort, your home may be repossessed if you do not keep up repayments.

If you're looking to release some money from your home to pay off an existing mortgage, this is one of the options available to you.

About our Retirement Interest Only Mortgage Retirement Interest Only Mortgage calculator