Can I Sell My House if I Have Equity Release? Quick Answer

Are you wondering whether you can sell your house if you have equity release? This article will answer your question in simple, easy-to-understand words. We know that equity release can be confusing. You might worry about what happens to your house or if you can sell it, but don’t worry; we’re here to help.

Our team has many years of experience explaining equity release in a way that's easy to understand.

In this article, we’ll tell you about:

• What equity release is and how it works.
• The different types of equity release schemes.
• How selling your house can affect your equity release.
• The role of the Equity Release Council.
• What to think about if you’re considering equity release.

We understand your worries. We know that your house is important to you, and you want to make the right choice, which is why we’re here ‚Äì to guide you through this process.

Let’s dive in.

A simple explanation of equity release

Most standard lifetime mortgages start at age 55, but some payment-term lifetime mortgages are available from 50 and require interest payments for an agreed period. Home-reversion minimum ages and all other eligibility rules depend on the provider. Check the youngest applicant’s age and the actual product criteria. A lifetime mortgage is a loan secured on your home; you retain ownership. Interest that is not paid is added to the balance. The loan is usually settled when the last borrower dies or moves permanently into care, subject to the contract. Required or optional repayments vary by product.

Do you still own your house with equity release?

With a lifetime mortgage you retain ownership subject to the mortgage. With home reversion you sell part or all of the ownership; if all is sold, you retain occupancy rights under the agreement rather than a share of ownership.

Can you sell your house if you have equity release?

The simple answer is yes. But things aren’t quite that simple. 

It is possible to sell your house and move to another property when you have already taken out an equity release plan. If you have a lifetime mortgage or home reversion scheme through an equity release provider that is a member of the Equity Release Council, they should agree to allow you to move to a ‚Äòsuitable alternative property’.

The new property must meet the provider’s criteria. Equal or higher value does not by itself guarantee acceptance; valuation, legal work, fees and other conditions may apply.

Downsizing may require partial repayment and charges. Any downsizing protection must already apply or be specifically agreed, and its conditions must be met. See related guidance.

Some properties you may want to move to may be difficult to sell in an open market, such as Airbnbs, boathouses, mobile homes or static homes. This may not be considered as a suitable alternative property and your lender could deny your request. If you have plans to move to any of these property types, you should let your financial adviser know from the start. 

Can you lose your home with equity release?

For a plan meeting the relevant Equity Release Council standards, the right to remain depends on keeping the property as your main residence and meeting the contract terms. A no-negative-equity guarantee limits repayment to the net sale proceeds when its conditions are met; it does not stop the balance growing or make the product risk-free.

Even after death, some equity release providers will allow the estate beneficiaries to keep the home if they pay off the debt. This may be preferable if the home has sentimental value or may be used by one of the beneficiaries. 

Alternatives to porting

It’s essential that you consult with a financial adviser or mortgage expert when you are considering selling your home and moving with an existing equity release plan. Just as you sourced advice when you first took out the loan, the same is required now. 

In some situations, the adviser may recommend an alternative strategy to porting, such as paying off your current plan and getting a new one on another property. They should account for all fees and charges to identify the cost-effective option. But this process would take longer. 

Equity release and moving house – quick recap! 

Moving can be possible if the provider accepts the new property under its current criteria. Equal value or easy resale is not a complete eligibility test.

If you decide to move to a suitable alternative after taking out an equity release plan, you can take your plan to the new property in a process known as porting. 

A cheaper property may require partial repayment. Charges and any exemption depend on the plan and the conditions of downsizing protection.

Read more guides all about equity release plans!

We have answered plenty more frequently asked questions about equity release plans on the MoneyNerd blog. 

If you want to know about equity release and its relation to inheritance tax, means-tested benefits, interest rates or just the overall benefits and risks – we have content for you. All of our guides are free and written to keep you in the know.