Estimate how much you could release from your property and see the long-term cost of a lifetime mortgage.
This calculator provides estimates for guidance only. It does not constitute financial advice. Equity release is a lifetime mortgage and will reduce the value of your estate. You must receive independent legal advice before proceeding. Only consider equity release products regulated by the FCA.
Equity release allows homeowners aged 55 and over to access the wealth tied up in their property without having to sell or move. The most common form of equity release in the UK is a lifetime mortgage, where you borrow a percentage of your property's value and interest rolls up over time. The loan and accumulated interest are repaid when you die, move into long-term care, or sell the property. The amount you can release depends on your age and the value of your property. Younger applicants (aged 55-60) can typically release 20-25% of the property value, while older applicants (aged 80+) may access up to 45-50%. This age-based loan-to-value structure reflects the shorter expected loan duration for older borrowers and the correspondingly lower risk to the lender. Equity release has grown significantly in the UK, with the Equity Release Council reporting record lending in recent years. However, it is a major financial decision with long-term consequences. Because interest compounds without any repayments, the debt can grow rapidly. A GBP 120,000 equity release at 5.5% interest would grow to approximately GBP 205,000 after 10 years and GBP 350,000 after 20 years. This is why it is essential to model the long-term cost before proceeding. All equity release products sold through members of the Equity Release Council include a no-negative-equity guarantee, meaning you will never owe more than the value of your home. The FCA regulates equity release advisers, and you are required to receive independent legal advice before completing a plan. This calculator helps you estimate the amount you could release, the net amount after clearing any existing mortgage, and the long-term impact on your estate.
To estimate your equity release: 1. Enter your property value. Use a recent estate agent valuation or check comparable property sales in your area. The property must be your main residence and located in the UK. Equity release is available on most property types, though some lenders have restrictions on certain construction types or ex-local authority flats. 2. Enter your age. You must be at least 55 to access equity release. The older you are, the more you can typically release. For joint applications, the age of the younger applicant is used to determine the maximum release. 3. Enter any outstanding mortgage. If you have an existing mortgage on the property, it must be cleared as part of the equity release. The net release amount is the maximum release minus any outstanding mortgage balance. For example, if you can release GBP 120,000 and have a GBP 50,000 mortgage, you would receive GBP 70,000 in cash. 4. Set the interest rate. Equity release interest rates are typically fixed for life and currently range from 4.5% to 7%. The rate you receive depends on the lender, the LTV, and your age. Some plans offer the option to make voluntary partial repayments to control the debt growth. 5. Review the projections. The calculator shows your maximum and net release amounts, and projects the debt growth over 10 and 20 years. The line chart compares the growing debt against the estimated property value (assuming 2% annual growth), showing how remaining equity changes over time.
The equity release calculator uses two key calculations. First, the maximum release is determined by applying an age-based loan-to-value percentage to the property value. The LTV increases with age: 20% at age 55, 25% at age 60, 30% at age 65, 35% at age 70, 40% at age 75, 45% at age 80, and 50% at age 85. For ages between these points, the LTV is interpolated linearly. For example, at age 62, the LTV is 27% (between 25% and 30%). Second, the compound interest projection shows how the debt grows over time without any repayments. The formula is: debt at year N = release amount x (1 + interest rate)^N. For a GBP 120,000 release at 5.5%, the debt after 10 years is GBP 120,000 x 1.055^10 = approximately GBP 205,000. The remaining equity projection assumes property growth at 2% per year: property value at year N = current value x 1.02^N. The remaining equity is the projected property value minus the projected debt. Over time, if the interest rate exceeds the property growth rate, the equity diminishes. However, the no-negative-equity guarantee means the debt can never exceed the property value at the point of sale.
There are two main types of equity release: lifetime mortgages and home reversion plans. Lifetime mortgages (covered by this calculator) are by far the most popular, accounting for over 99% of equity release plans sold in the UK. Home reversion plans involve selling a portion of your home to a provider in exchange for a lump sum or regular payments, while retaining the right to live there rent-free. Some modern lifetime mortgages offer features that help manage the cost. Drawdown lifetime mortgages allow you to take an initial lump sum and then draw down further amounts as needed, meaning interest only accrues on the money you have actually taken. Interest payment plans allow you to make monthly interest payments (like a standard mortgage) to prevent the debt from growing. Some plans allow ad hoc capital repayments of up to 10% per year without penalty. Equity release can affect your eligibility for means-tested benefits such as Pension Credit and Council Tax Reduction. The lump sum received is not taxed as income, but if it is retained as savings, it could be counted as capital for benefits assessment. It is strongly recommended to consult a qualified equity release adviser who can assess your full financial picture, including inheritance, tax, and benefits implications.