Equity Release Calculator
If you’re over 55 and want to be able to unlock some of the value of your home, equity release could help.
See what your options could be with our equity release calculator.
What is an equity release mortgage?
An equity release mortgage is a loan secured against the value of your home. It enables you to unlock some of your equity in the form of a tax-free lump sum and/or payments to achieve a variety of goals. You can stay in your home and the money is paid back when the last homeowner on the deeds dies or goes into long-term residential care.
See instantly how your property wealth could work for you
Whether you want to increase the value of your home with renovations, help the family with an early inheritance, pay off an existing mortgage or boost your disposable income, equity release can help make your plans a reality. Use our equity release calculator to see how much wealth you could unlock from your property.
Equity Release Calculator
Are you a UK homeowner over the age of 55? Use our speedy 2-step calculator to find out how much you can release and request your free equity release guide.
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Why should I enquire?
- Rated ‘Excellent’ on Trustpilot.*
- We will provide your results in two easy steps.
- We compare plans from across the whole market, from lenders approved by the Equity Release Council.
- Compare The Market have selected Responsible Equity Release as their only trusted equity release broker.
- We only offer plans that have a no-negative-equity guarantee, so you won’t have to worry about owing more than your home is worth.
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Our partner, Responsible Equity Release, will post you a free equity release brochure with every calculation. Responsible Equity Release's Information Team will also get in touch with you in the future. This team is not there to sell anything to you - their sole purpose is to assist you with your enquiry and provide more information where needed. To find out more about how they protect your data click here
Responsible Equity Release is a trading style of Responsible Life Limited. Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (https://register.fca.org.uk/) under reference 610205. Only if you choose to proceed and your case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,690. A lifetime mortgage may affect the value of your estate and your entitlement to means-tested benefits. Our advisor will talk you through this and the setting up costs before you make any decision to proceed. Think carefully before securing other debts against your home.
How does the equity release calculator work?
The calculator will give you an approximate idea of how much equity you might be able to release with a lifetime mortgage. It will only be an estimate, as the amount you can release will depend on other lending criteria, the condition of your property and the lifetime mortgage you choose.
The calculator is provided by our equity release partner Responsible Equity Release.
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How does equity release work?
Equity release works by releasing some of the value of your home as a tax-free, cash lump sum or as separate payments. Equity release is an option for people aged 55 and over.
A lifetime mortgage is the most popular form of equity release. If your home is worth more than your outstanding mortgage balance, with a lifetime mortgage you could:
- Release some of the equity, tax-free, in cash
- Pay off any outstanding mortgage – if applicable
- Still fully own your own home and stay living there
- Make no monthly payments unless you choose to do so.
Equity release can work well for people who are property-rich yet cash-poor, often because their home has gone up in value, but their pension and savings have been reduced by inflation and low interest rates.
There are two main types of lifetime mortgage:
- Lump sum – you get a one-off, tax-free lump sum. Interest is added on and repaid, along with the initial loan, usually from the sale of the property.
- Drawdown – you take an initial lump sum, as above, then create a reserve of equity to draw on in the future. Interest is only charged on the reserve of equity from when the money is taken
Flexible features – you’re guaranteed the right to make payments with all lifetime mortgage products offered, whether that’s to clear the interest or reduce the amount borrowed. The type of payment is subject to lender criteria.
It’s very important to find the right lifetime mortgage for you and your personal situation. Seek professional advice to find out more about the equity release possibilities that could be available to you and how they could affect your future finances and the value of your estate.
How is equity calculated?
Your home equity is calculated by subtracting your mortgage balance, as well as any other outstanding loans secured against your home, from the current value of your home. Simply put, equity is the share of your home that you own outright, without owing a mortgage or loan on it.
So, if your mortgage balance is £50,000 and your house is now worth £250,000, you’ll have £200,000 equity in your property.
Most lenders will typically allow you to release between 20-60% of the equity, depending on your age. In general, the older you are, the more equity you’ll be able to release. Factors such as where you live, the property type and your health may also influence how much you’re able to release.
Is a lifetime mortgage right for you?
You could be eligible for a lifetime mortgage if:
- You’re over 55.
- You own the home you want to release equity in, with no mortgage, or a small enough mortgage that you can pay it off with the released funds.
- Your home is in good condition.
- Your home is worth more than £70,000.
- You want to borrow a minimum of around £10,000-15,000.
If you want access to some extra cash without having to sell up and move house, using the equity in your home could be a good option. That said, it might not be the right choice for you.
Before you make any kind of decision, it’s important to get professional financial advice and weigh up the pros and cons to better understand what equity release could mean for you.
Pros of using the equity in your home:
- You can access cash tied up in your home without having to move.
- You can use the cash for a variety of goals.
- You could use the equity in your home to pay off an outstanding repayment or interest-only mortgage.
- You can choose not to repay anything until you die or move into permanent long-term care.
- You could remortgage and use the equity to find a better mortgage deal or release cash.
- You may be able to transfer your lifetime mortgage to a new home, subject to your lender’s criteria.
Cons of using the equity in your home:
- Equity release mortgages tend to have higher interest rates than traditional mortgages.
- You typically need to be over 55 to qualify for equity release, so it’s not an option for younger homeowners.
- Boosting your disposable income with a tax-free cash injection may affect your eligibility for any means-tested state benefits you might otherwise be entitled to.
- Using the equity in your home will reduce the value of your estate, which could mean leaving little or nothing to your loved ones when you die.
- If you gift your lump sum from equity release to loved ones, they may have to pay inheritance tax on it if you die within seven years.
- You may have to pay early repayment charges if you choose to pay all or a significant chunk of the equity release loan early, or use the cash to pay off other loans.
What else should I consider before releasing equity?
Unlike a normal mortgage, where you pay interest monthly, with a lifetime mortgage the interest rolls up every month and is added to the amount you released. Everything you owe gets paid back in one go, once the house is sold or when the last homeowner on the deeds dies or goes into long-term care.
This means you won’t have the full current value of your home to leave to others. If this is important to you, you might want to consider an equity release plan that allows you to ringfence some of your home’s value as an inheritance for children.
You do have the option to repay early if you want to, but you might have to pay early repayment charges. If this is something you’re likely to want to do, consider a plan with fixed and defined early repayment charges.
All plans that meet the Equity Release Council product standards will also allow you to make voluntary payments to mitigate the cost of borrowing, usually up to 10% of the mortgage value per year (but this varies among lenders). Anything you pay over this amount may also be subject to an early repayment penalty.
How much does equity release cost?
There are costs involved in setting up a lifetime mortgage, which could include:
- Fees for professional financial advice, which may involve a commission fee
- Valuation fees
- Solicitor’s fees
- Administration costs charged by a provider to set up the mortgage, often called lender, completion, arrangement or applications fees.
You may also be charged early repayment fees if you pay off your loan early.
Once the lifetime mortgage is set up, you won’t have to make any repayments unless you choose to do so. All interest can be rolled up and taken from the sale of the home after the last homeowner has died or gone into permanent long-term care.
With drawdown plans, you only build interest on the money that you’ve accessed. However, the money you access will be fixed at the interest rate of the time and so could be higher or lower than your initial rate.
You’re guaranteed the right to make voluntary payments to help cut the costs of releasing equity.
What types of equity release are available?
There are two main types of equity release – lifetime mortgages, outlined earlier in this article, and home reversion plans.
Home reversion plans are generally aimed at people over 70. You sell a stake in your home that the reversion company then owns. In return, you get a regular income or a tax-free lump sum. You won’t have to pay any rent, but equally you won’t get the full market value of your home.
Comparethemarket’s equity release partner Responsible Equity Release doesn’t advise on home reversion plans. The calculator here is solely for lifetime mortgages.
If you’d like advice on a home reversion plan, you can find a qualified advisor at unbiased.co.uk.
Frequently asked questions
How much can I get from my home?
The amount you can release varies, depending on several factors. These include:
- The age of the youngest applicant – you or your partner
- How much your home is worth
- Where your home is.
Some providers may take other factors into account too, such as your health and your lifestyle – for example, if you smoke.
The calculator will give you a good idea of what you might be able to expect. You can release as little as £10,000 from your home and choose to create a reserve fund to use in the future, if you’d like.
What information do I need to provide to use the equity release calculator?
All you’ll need to give us is an estimate of how much your property is currently worth and what mortgage is outstanding, along with your contact details.
If you’re not sure how much your home is worth, you can get a rough idea by checking property websites like Rightmove to see how much similar properties, in a similar condition, are selling for in your neighbourhood.
Any lifetime mortgage lending depends on a satisfactory survey of your property on behalf of the lender and completion of legal paperwork, which can take time. So it’s sensible not to commit to any spending linked to your lifetime mortgage until the money is in your account.
Can I compare equity release plans?
If you want to know about the different types of equity release plans and the choices you have, see our guide to equity release that explains the differences and their benefits.
What does the no-negative-equity guarantee mean?
It means that you will never owe more than the value of your home – so there’ll be no lifetime mortgage debt left behind on the eventual sale of your home.
It works like this: once your home stops being your primary residence and is sold, the sale proceeds are used to pay off the lifetime mortgage and any interest that has built up. Once the loan has been repaid, any remaining money will be paid to your estate.
In the highly unlikely event that your home sells for less than the amount of the loan, the remaining balance will be written off.
What about moving to another property?
Releasing equity doesn’t mean that you can’t move home later on. All lifetime mortgages that meet the Equity Release Council product standards guarantee you the right to move home. You may be able to transfer your lifetime mortgage to your new home, but this is subject to the lender’s criteria.
If you’re weighing up the pros and cons of equity release and downsizing, then remember to take into account the costs of buying and selling, like estate agents’ and solicitors’ fees, stamp duty and moving costs.
Will I be taxed on the equity I release?
No. The money released to you is tax-free. However, taking money out of your home will reduce the value of your estate and could affect your eligibility for means-tested benefits.
A fully qualified advisor will talk through all of this in detail before you commit to releasing equity.
How safe is equity release?
Equity release plans available today are considerably safer than those available in the past. Reputable companies abide by a code of conduct and best practice set by the Equity Release Council.
With better consumer safeguards in place, equity release can provide real financial security for older homeowners, but it’s important to seek professional advice to make sure it’s the right option for you.
What our expert says...
“Equity release is a good way for homeowners to access the wealth built up in their homes without having to move. Lifetime mortgages give you the freedom to spend the money in a variety of ways, from helping out a child with a deposit for their first home to making repairs, adaptations and improvements to your home or boosting your disposable income to have an easier retirement. Our simple-to-use calculator can quickly give you a good idea about how much you could get.”
- Daniel Evans, Mortgages expert
What do I need to get a quote?
To use the calculator, you’ll need an estimate of how much your house is worth and some personal details.
If you want to go ahead and release equity from your home, an advisor from Responsible Equity Release will discuss your needs, current circumstances and what you want to achieve. They’ll work out a tailored solution to match what’s right for you in the long term.
Who is Responsible Equity Release?
Comparethemarket’s equity release partner Responsible Equity Release** is authorised and regulated by the Financial Conduct Authority. It has access to plans from the whole of the market of equity release providers approved by the Equity Release Council. which sets standards and best practice for equity release providers.Go to Responsible Equity Release
**Responsible Equity Release is a trading style of Responsible Life Limited. Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register under reference 610205. Only if you choose to proceed and your case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,690. A lifetime mortgage will reduce the value of your estate and could affect your entitlement to means-tested benefits. Its advisor will talk you through this and the setting up costs before you make any decision to proceed.
Responsible Equity Release is not part of Compare the Market Limited. Comparethemarket receives a % of the commission that our partner Responsible Equity Release earns.
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