Equity Release plans are available to UK homeowners aged 55 and over. Your property must be worth at least £70,000, and your income does not affect your eligibility. The older you are, the larger the amount you can release.
The main eligibility criteria are:
- You are aged 55 or over
- You are a homeowner and own property in the UK
- Your property is worth at least £70,000
You must clear any existing mortgages, either from savings or with the equity release funds, after which you can spend the money however you wish.
There are other considerations your advisor, and the lender will make when reviewing whether you are eligible for a particular plan. We explore many of these below:
If following this guide, you have further questions regarding what equity release is and how plans work, please see our full 2024 equity release guide.
The minimum age for an equity release plan is 55, but some plans are only available to older applicants; The majority of equity release plans are available to those over 60.
When lenders consider how much money they can lend, they look to the age of the youngest applicant.
Why not try our equity release calculator to see how much money you may be able to release.
If you co-own your property with someone younger than 55, they will be required to come off the deeds for you to take out an equity release plan.
The minimum property value for equity release plans is £70,000. If your property is worth more than £1 Million, additional underwriting checks may be required.
Most plans have a maximum loan amount rather than a maximum property value. However, if your property is of considerable worth, you may be required to pay for the valuation upfront.
All equity release lenders intend repayment when the last borrower passes away or moves into long term care. Therefore saleability of the property is one of the lenders most essential considerations when looking to lend money.
The property must be habitable and in good state of repair. Some lenders are more flexible than others, so if you have any concerns over your property, you should speak with your equity release advisor.
As part of any application, the lender will instruct a qualified surveyor to visit the property. This will allow them to establish the market value of the property, and check the property meets the plans lending criteria.
Yes, the location of your property is something lenders consider. If you live in mainland England, Wales or Scotland you have access to all plans. Currently, there are only two lenders who offer equity release in Northern Ireland. Some lenders also exclude some islands. For example, you can get Equity Release in the Isle of White, but you cannot in the Isle of Man.
On a more local level, the lender will also consider anything near your property, which may affect its resale. For example, if there were a pub next door, or a railway line nearby, these may impact the lenders' willingness to lend.
If you are concerned about the location of your property, you can contact one of our local advisors who will be able to guide you through which lenders may consider your property. Even if lenders previously rejected your property, we might be able to source you a lender who will now accept the location of your property.
The absolute minimum you can release is £10,000; although you can elect to have any plan setup fees taken from this amount.
Other plans will have higher minimum release amounts which may, in turn, provide you with a lower interest rate.
The maximum loan amount depends on your age and property value. Some lenders will cap the amount that they can lend; however, some will allow you to refer the case if you wish to exceed their cap. Currently, any loans over £2 Million would have to be referred to the lender for them to decide how much they are willing to lend.
No, you do not need a good credit score to have an equity release plan. The main reason is that you are not required to make payments during the term. Therefore, the lender does not require you to meet any affordability criteria.
Some lenders will require that you clear any outstanding IVA's or County Court Judgement's (CCJ's). However, you can usually use the equity release funds to do this.
An instance that credit does affect an equity release plan is if you are in an undischarged bankruptcy. In such cases, you will not be able to get an equity release plan until discharged from bankruptcy.
You can get equity release on most standard construction properties (brick, stone, tiled/slate roof), including:
We have seen over recent years that lenders are becoming more and more flexible with property types. Some that would have been an issue in the past but are now considered, include:
- Properties with an annexe
- 100% flat-roofed properties
- Properties with an element of commercial/business activity
- Certain types of spray foam insulation
There are some property construction types which still can be more difficult, including:
- Concrete buildings
- Timber-framed buildings
- Metal-framed buildings
For these types of property, it depends mostly on the type and age of construction. Please get in touch if you are worried about your construction type, and we can guide you as to which lenders and plans you may be able to achieve.
Yes, you can get equity release on leasehold properties providing that the remaining lease length meets the lenders underwriting requirements. An example is for some lenders there needs to be at least 160 years, less the age of the youngest applicant, remaining on the lease.
If you do not have a sufficient lease length, it may be possible to extend your lease as part of the equity release process. In such instances, we see that the process takes longer than usual, and you will be required to make payment for some additional costs upfront. However, you can use the equity release funds to pay for the capital owed to extend the lease.
Yes, you can get equity release on ex-local authority properties. However, lenders will consider the percentage of properties that are still local-authority owned in the area.
If your property is a flat, currently the minimum property value accepted is £200,000.
If your property is leasehold, and the freeholder is the council, the lender may insist that you purchase the freehold to get equity release. Again this can be carried out concurrently with the equity release application. However, the application will take longer, and there will be additional costs.
If you have further questions, why not speak with one of our qualified advisors?
Call us on 0207 158 0881 or use our online form to book your FREE consultation.
While a qualified equity release advisor has written this guide, it is not intended to be used as financial nor legal advice and should not be relied upon.
To understand the full features and risks of an Equity Release plan, ask for a personalised illustration.
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