Equity Release Schemes for Over 55s Reviews & In-depth Info
Our preferred equity release adviser is Age Partnership. For free and impartial money advice you can visit MoneyHelper.
Our preferred equity release adviser is Age Partnership. For free and impartial money advice you can visit MoneyHelper.
“Equity release for over 55” is a popular search online because so many seniors want to know if they can release equity without taking out a home equity loan, which is usually not available to older people nearing retirement. The good news is they can – and we’re here to discuss the details.
Is there an age limit for equity release?
To use an equity release product in the UK, you will almost certainly need to be at least 55 years old and sometimes older. If the property is owned by a couple, it is the youngest homeowner who must meet the minimum age requirement to apply.
Along with the age restriction, equity release can only be done on a main residence with no existing mortgage or a very small existing mortgage. Moreover, the property must be of a minimum value set independently by each lender but usually around £75,000.
What is the maximum age for equity release?
There is no maximum age requirement to use any type of equity release scheme in the UK. In fact, it is recommended to use these schemes as late as possible because the loan will incur less interest by the time it needs to be repaid. Martin Lewis is quoted on TV as saying to borrow “as little as possible as late as possible”.
How equity release could help
More than 2 million people have used Age Partnership to release equity since 2004.
How your money is up to you, but here’s what their customers do…
Find out how much equity you could release by clicking the button below.
In partnership with Age Partnership.
Equity release for over 55s in detail
As mentioned, there are two ways to complete equity release as an over 55. Lifetime mortgages do have some variations and are more common, but home reversion plans are also still an option. Learn about them both below.
- Lifetime mortgage
A lifetime mortgage provides a loan based on your home equity and is charged with a fixed interest rate for the lifetime of the mortgage (and possibly your lifetime). The interest is not repaid but rolls up, making the total debt bigger over time.
A £65,000 lifetime mortgage charged at 6.4% over 12 years can grow close to a £137,000 debt. This is only repaid from the property sale after you die or move into care. Some people choose to volunteer interest repayments to keep the debt down.
Unlike lifetime mortgages, home reversion plans do not charge interest. The homeowner must agree to give up a fixed percentage of the property’s future sale proceeds in exchange for some home equity as a lump sum or drawdown. The amount you repay can be double or triple what is taken out.
For example, releasing £50,000 on a £150,000 home could mean giving up 60% of the future value of the home, which may have also increased (or decreased!).
» TAKE ACTION NOW: Find out how much equity you could release
How much equity can you release at 55?
Most lifetime mortgage lenders will only allow homeowners to release up to 60% equity at most. What you can release will be based on details of the property and your age. The older you are the more you can release.
Thus, if you only just qualify for equity release at 55 years old, you might only be able to release 10-40% equity in many cases. However, if you have a terminal illness, you could use an enhanced lifetime mortgage to release more than 60% equity.
Join thousands of others who release equity
Age Partnership have helped over 2 million people release equity from their home.
Mrs Wareham
“I am more than pleased to have taken out Equity Release with Age Partnership.”
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Does equity release affect your state pension?
Releasing equity does not affect your eligibility to receive a state pension, but it can affect your entitlement to pension credits. This is because your savings will increase and for every £500 you have in the bank above £10,000, your pension credits are reduced by £1. No longer receiving pension credits can wipe out your entitlement to other means-tested benefits or even stop you from getting a council tax reduction.
For this reason, you could benefit from a drawdown facility rather than a lump sum payment from your lender.
Things to consider
Equity release will involve a home reversion or a lifetime mortgage, which is secured against your property and will reduce the value of your estate and impact funding long-term care. Our equity release partner, Age Partnership provides a personalised illustration to explain the full details. The money you release, plus the accrued interest is then repaid when you die or move into long-term care. Advice is required before proceeding with equity release and any existing mortgage must be repaid. Age Partnership provide initial advice for free and without obligation. Only if your case completes would Age Partnership’s advice fee of £1,895 be payable. Other lender and solicitor fees may apply.
