29 Oct 2024

How much equity can I release?

There’s one question people always ask when they’re looking into equity release: “How much can I borrow?”

Well, you can usually release between 20% and 60% of your property’s value. Lifetime mortgages (LTMs) are a loan secured against your home and the most popular kind of equity release, so we’re going to focus on them in this article. On average, at the end of 2023 new LTM customers were releasing about £79,484 from their properties.

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How much equity could you release?

If equity release sounds like it could be an option for you, use our equity release calculator to see how much money could be tied up in your home.

What impacts how much equity I could release?

These are the main factors affecting how much equity you can release from your home:

  • How old you are
  • How much your home is worth
  • What type of property it is, where it’s located and any unusual features it might have
    • For example, some providers won’t lend against properties with thatched roofs, ones on flood plains or ones near busy pubs. Our own restrictions include not lending on retirement properties or homes with other restricted leases.
    • Your financial adviser will talk you through any issues here.
  • For some types of LTM, like our Payment Term Lifetime Mortgage, your lender will take affordability into account

For an estimate of how much equity you could release from your home, try our Equity Release Calculator.

Want to learn more about equity release?

We look at how long it could take for you to release equity from your home and what the process involves.

Can I increase the amount of equity I can release?

That depends on the type of equity release you go for. Some of them offer a drawdown facility, which lets you take out smaller payments up to an agreed limit over time. Each payment gets added to the amount you owe your lender. How much you can borrow in total will still be based on the factors we mentioned above.

Your lender will set the interest rate on each payment when you take it out, so it could well be different from the rate on your first one. And bear in mind that:

  • If you don’t make payments to cover your interest, the amount you owe can grow quickly
  • Any money you draw down could affect any means-tested benefits you’re getting

What should I do next?

  • Get a rough idea of how much equity release you can get with our Equity Release Calculator – it will give you an instant estimate.
  • If you have a financial adviser, check in with them. If you don’t, you’ll need one – you can only take out an LTM through a qualified adviser. Find one at the Unbiased website.
  • Explore our other equity release articles – we’ve linked to some of the most helpful ones at the bottom of the page.

The minimum amount of equity you can release as your first lump sum is usually £10,000. If you go for a product that lets you draw down more payments, each of them usually has to be at least £2,000. For more on how that works, take a look at our What is equity release article.

For a traditional lifetime mortgage, the maximum amount you can borrow depends on your age and state of health, and the value and type of your property. For other kinds of lifetime mortgage and equity release in general, other factors will come into play.

You can usually choose how to spend the money you release, so you can put as much as you want into another property. But you can only borrow against your main residence. So your new property could (for example) be a holiday home or somewhere for a loved one to live, but you can’t move into it permanently yourself.

If you’re helping a loved one onto the property ladder, you just give them the money. They’re free to do whatever they want with it, though you should both bear in mind any inheritance tax implications of your gift.

There are many alternatives to equity release, though whether you either can or want to access them will depend on your personal circumstances. They can include downsizing, remortgaging with a standard mortgage or drawing on savings or assets you’ve built up elsewhere. Equity release isn’t right for everyone, so it’s always worth looking at all possible alternatives. Our Is equity release a good idea? article will help you with that.

Our equity release experts
David Hamilton

David Hamilton

Head of Product, Product & Proposition, Home Finance

As LGHF’s Head of Product, David’s responsible for bringing new products to market and making sure that our existing products stay marketplace relevant. He leads a team of four product, customer outcome and proposition managers.

More about David
Luana Jordan

Luana Jordan

Product Manager, Product & Proposition, Home Finance

Luana works in LGHF’s New Product Development team. She’s the product owner of our new Payment Term Lifetime Mortgage (PTLM), and also works on our Lifetime (LTM) and Retirement Interest Only (RIO) Mortgages.

More about Luana

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