Equity Release Calculator
If you’re over 55 and want to be able to release some of the value of your home, equity release can help. See what your options could be with our equity release calculator.
What is an equity release mortgage?
An equity release mortgage is one that enables you to use the equity in your home to provide you with a tax-free lump sum and/or payments. 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.
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.
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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 adviser 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.
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How does equity release work?
For many people aged 55 and over, a lot of their wealth is locked up in the value of their home. Equity release does exactly what it says on the tin. It releases some of the value of your home as a tax-free, cash lump sum or as separate payments. Equity is the share of the home you own outright without owing a mortgage or loan on it.
The most popular form of equity release is a lifetime mortgage, which allows you to release equity from your home while still owning it. If your home is worth more than your outstanding mortgage, with a lifetime mortgage you could:
- Release some of the equity, tax-free, for 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 three main types of lifetime mortgage:
- Roll-up – a one-off lump sum. Interest is added up to be paid on sale of the property
- Drawdown – you take an initial lump sum, then more when needed. Interest is charged from when the money is taken
- Flexible – you can pay back interest when you’re able to, typically up to 10% a year, without repayment penalties.
It’s very important to find the right lifetime mortgage for you and your personal situation, as you must bear in mind that taking equity from your property may leave less for your estate in the future.
Boosting your disposable income with a tax-free cash injection can also impact your entitlement to means-tested benefits.
Therefore, it’s vital to seek professional advice and find out more about the equity release possibilities available. And don’t worry, we only offer plans that have a no-negative-equity guarantee, ensuring you never owe more than the value of your home.
What does having equity in your home mean?
Simply put, equity is the share of your home that you own outright. The amount of equity will include the original deposit you used to buy the property, plus any of your mortgage that you’ve already paid off. 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 around 50-60% of the equity, but it might be less. Factors such as where you live, the property type and your health may also have an effect on how much you’re able to release.
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 in your home 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 could use the equity in your home to pay off an outstanding repayment or interest-only mortgage.
- 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.
- Using the equity in your home may affect your eligibility for any means-tested state benefits you might otherwise be entitled to.
- Using the equity in your home could mean leaving little or nothing to your loved ones when you die.
Frequently asked questions
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 might 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.
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 of what 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.
Just so you know, 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 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.
Some plans will also allow you to make voluntary payments, usually up to 10% of the mortgage value per year. Anything you pay over this amount may also be subject to an early repayment penalty.
What about moving to another property?
Releasing equity doesn’t mean that you can’t move home later on, as all lifetime mortgages from lenders approved by the Equity Release Council guarantee you the right to move home – you may also be able to transfer your lifetime mortgage to your new home (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 agent’s and solicitor’s fees, stamp duty, moving costs and so on.
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 could affect your eligibility for means-tested state benefits.
If you were thinking about investing the money you released, then your tax position could be affected and the investment return may be less than the interest charged on the equity released.
A fully qualified advisor will talk through all of this in detail before you commit to releasing equity.
What are the different types of equity release?
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.
Compare the Market’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.
How safe is equity release?
Equity release plans available today differ greatly from those available in the past. Equity release is now a heavily regulated industry – and reputable companies abide by a code of conduct and can provide real financial security for older homeowners.
Compare the Market’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.
**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 £1,490. A lifetime mortgage may affect the value of your estate and 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. Compare the Market receives a % of the commission that our partner Responsible Equity Release earns.
How much does equity release cost?
All interest can be rolled up and taken from the sale of the home after death or entry into permanent long-term care.
With drawdown plans, you only build interest on the money that you’ve accessed.
Some plans have the option to make voluntary repayments to help cut the costs of releasing equity.
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 as you want, 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 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.