What is equity release?
Equity release is a tax-free way to get cash from the value that's tied up in your home, without having to sell or move. It’s a loan secured against your house, which is only repaid when you die or move into long-term care.
How equity release works
Equity release plans are available to UK residents who are aged 55 or over, and who own a qualifying property worth over £70,000.
The money you release is tax-free. You'll need to use it to pay off any outstanding mortgage first, but you can spend the rest however you like. For example, lots of people use it for home improvements or to help their family.
You can choose to release the money in one lump sum or in smaller instalments. There are no monthly repayments, although some plans do give you the option to pay off the interest of the loan monthly.
With a lifetime mortgage (the most popular equity release mortgage), the outstanding loan and any unpaid interest is paid back when your house is sold. This is usually when you pass away or move into long-term care.
If you'd like to know more, try our free helpline or find out more about how equity release works.
3 simple first steps if you're thinking about equity release:
Lowest interest rate
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Equity release interest rates
When you speak to your adviser, from our trusted partner Age Lifetime, they'll aim to find the right equity release plan for you with the lowest interest rate available. This will depend on your circumstances and the plan type you choose.
Lowest rate available
We last checked this on 20 October 2021.
The average rate
Based on the number of people who used our serviced and completed between 1st January 2021 and 30th June 2021.
The interest is usually paid off with the rest of your equity release loan, either when you pass away or move into long-term care.
With a lifetime mortgage, interest is usually added in the first month. Then the following month's interest is added to your loan amount plus the previous month's interest. This carries on for as long as you have your loan.
Some equity release plans give you the option to pay off some or all of your interest, usually in monthly instalments. Your adviser can discuss this option with you in more detail.
To see examples and find out more about how equity release interest rates work, read our article How much does equity release cost?
If you'd like to know more about equity release interest rates and get a personalised quote, call us today on 0800 092 09 35
More on equity release
How much has your house made you?
Call free on 0800 092 0939
Find out how much equity you have in your home
The average house is now worth three times more than in 2001.* That's exciting news if you're thinking about releasing equity, because the amount of money you could access depends on the value of your home (as well as your age).
For example, if you're 65 and your house is now worth £200,000, you could release up to £80,000. But if you're 75 with a home worth £200,000, you could release up to £100,000.
To find out how much equity you could release, call us for a free eligibility check. Our friendly team will ask some quick questions about you, your household and your property.
If you're eligible, we'll put you through to an equity release expert at Age Lifetime, our trusted partner. They'll help you work out how much your home is worth and how much equity you could release.
Then, once you've chosen a plan, your equity release provider will give you a professional valuation of your property.
If you're not sure what your home is worth, you can call free on 0800 092 09 39 to find out now
Is equity release a good idea?
Deciding if equity release is right for you
If you're aged 55 years or older, and a UK homeowner with a property worth at least £70,000, you could release equity. But whether or not it's right for you will also depend largely on your personal circumstances. If you agree with the statements below, then it could be an option worth exploring.
You want to top up your income without monthly repayments
Releasing equity lets you access your cash tax-free, in one lump sum, or in smaller instalments. Generally, unlike most other forms of borrowing, you do not have to pay monthly repayments on your loan.
You want to stay in your own home
One of the main advantages of releasing equity is the right to stay in your own home. Your home will only be sold when you pass away or go into long term care.
You understand it will reduce the inheritance you leave behind
Equity release is designed to help you and your loved ones enjoy your money during your lifetime. The equity you release is paid back from the sale of your home, so there will be less money available for inheritance.
You want the freedom to spend your money however you like
Once you receive your cash, you’re free to spend the money how you wish. The only exception is if you have a balance left on your mortgage, in which case you’ll need to use some of the cash to pay it off.
Our customers have used the money they release for all sorts of things, including home and garden improvements, paying off debts, early inheritance for their family, or maintaining a comfortable lifestyle during retirement.
Remember, equity release isn't right for everyone. We can take you through a couple of questions to check if you’re eligible, and if you are, we can put you through to an expert adviser from our partner, Age Lifetime. They'll explain everything step-by-step, so you can decide what the best option is for you.
If you’re interested in releasing equity from your home, we can check if you’re eligible with a quick call – and there's no obligation to go ahead. We’ll also be able to tell you how much equity you could release. To start your free eligibility check, call us on 0800 633 55 66.
The pros and cons of equity release
Weighing up the pros and cons
Releasing equity isn’t right for everyone, so it's important to weigh up the pros and cons. Read our article to understand the common advantages and potential pitfalls.
When you speak to an adviser they'll walk you through all the pros and cons and what they mean for your personal situation. Here are some of the key considerations they'll discuss with you:
- You’ll get tax-free cash for retirement to supplement your income.
- You can stay in your own home and legally own it until you die or move into permanent care.
- There’s no need for monthly repayments, although you can choose them with some plans.
- It won’t leave your family in debt.
- You can choose to ring fence some of the value of your home to leave as inheritance.
- Interest is added each year and can grow quickly.
- There’ll be less inheritance for your family as equity release reduces the value of your estate.
- Your means-tested benefits and tax position may be affected.
- You may not be able to borrow more in the future.
- There may be fees to pay, though you can use some of the money you release to cover them.
- You continue to own your house with a lifetime mortgage which is a debt secured against it. The value of equity released, plus accrued interest, is to be repaid upon death or moving into permanent long-term care.
- If you have an existing mortgage, you must use the money you release to pay it off first.
Get answers to your questions – Call our helpline on 0800 633 55 66 to speak with one of our friendly UK team – it's free and there's no obligation.
Types of equity release schemes available
The different types of equity release schemes
Your equity release adviser will discuss different schemes and how they might work for your personal circumstances.
Lifetime mortgage – the most popular way to release equity
Access a lump sum, with no need for monthly repayments, and you’ll still own your own home.
Drawdown lifetime mortgage
Release cash in instalments over time, and only pay interest on what you’ve taken.
Interest-only lifetime mortgage
Release tax-free cash, and reduce interest by making repayments.
Home reversion plan
You sell all or part of your home to access a lump sum and live there rent-free.
Want to find out more the easy way? Get initial advice for free from an expert adviser from our trusted partner, Age Lifetime – our friendly UK team can connect you 0800 633 55 66
Speaking to an adviser
What to expect when speaking to an adviser
An adviser from Age Lifetime, our trusted partner, will help you decide if releasing equity is right for you.
You can speak to them over the phone, through a video call, or face-to-face. They’ll explain all of the details and the options available. To help you get started, we've compiled a list of possible questions you can ask your adviser.
Why speak to an equity release adviser?
You have to get equity release advice before you apply, but it’s also a good first step. Here’s why:
They'll answer all your questions
You can ask your adviser anything about equity release.
If it’s not right for you, they’ll say so
The advisers are impartial, meaning they’ll advise against equity release if they don’t think it’s suitable for you.
They'll find you the best rate
An adviser will look at options from across the whole market and find you the best deal.
Call our free national helpline, and we’ll connect you to an impartial adviser 0800 633 55 66
Applying for equity release
How to apply step-by-step
Applying for equity release isn’t a rushed process. There’s lots of advice and support along the way to make sure it’s right for you.
- Call 0800 633 55 66 to make an appointment with an impartial financial adviser
We’ll check your eligibility with a few quick questions, before putting you through to experts from our partner Age Lifetime. They are a member of the Equity Release Council, so will follow the Council's Statement of Principles for an added peace of mind.
- Talk it through with your adviser
You’ll discuss your circumstances, the options available and whether equity release is the right option for you. You can talk to your adviser as many times as you need.
- Complete your application
Your adviser will recommend the best plan for you and send you all the information. If you decide to go ahead, you’ll need to complete an application. Your adviser can help with this.
- Get independent legal advice
You’ll need to speak with a solicitor once you’ve returned your application. Your adviser can recommend suitable solicitors if you’d like them to.
- Receive your money
You’ll usually receive your cash lump sum or first instalment within 6 – 8 weeks of returning your application, but it could be sooner.
Have a question? Call us free on 0800 633 55 66
Selling your home or repaying your equity release loan early
What happens if you need to repay your equity release loan early
Whether you can repay the equity you’ve borrowed early will depend on your plan provider. There are often early repayment fees, so it’s best to check with your provider and equity release adviser before making any decisions.
Selling your house after equity release
With many schemes you can still move home once you’ve released equity. Just be aware that certain conditions may apply and there may be fees to pay. Your adviser can discuss this with you in more detail.
If you're thinking about releasing equity and want to know more about what happens afterwards, it's best to speak to an expert adviser. Different plans and providers vary in how they approach the sale of your home and early repayments (if you want to make them). An adviser can take you through the plans that are best suited to you.
Call our free helpline on 0800 633 55 66 to speak to our friendly UK team
What happens when you die or move into care
How your equity release loan will be repaid
There are a few options, depending on the type of plan you choose.
With a lifetime mortgage, the person who is in charge of your estate – perhaps your spouse or child – usually sells your home. Then the money made from the sale repays your equity release loan, including any outstanding interest.
If you don't leave your house to anyone in your will, or if you have a home reversion plan, your equity release provider will arrange everything instead.
The loan usually needs to be repaid within 6–12 months of your passing.
Your expert adviser will let you know what your options are right from the get-go. Just remember to keep your family in the loop, so they know what to expect when the time comes.
Want to speak to an expert? Call our helpline today on 0800 633 55 66
Answers to your questions
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1. Based on Age Lifetime completions between 01/01/21 and 30/06/21.
2. These figures are for illustration purposes only and are based on a lifetime mortgage. It is only an indication and isn't guaranteed. You should seek a personalised illustration and ask for more information. All figures are correct as of May 2021.
3. House Prices – Halifax 2019
Legal and regulatory information
Not all products are available outside of mainland UK, please call us to discuss if you have any queries.
This website contains information on how the SunLife Equity Release Service works. This website does not contain advice, so you will need to discuss your circumstances with an expert adviser to be satisfied equity release meets your needs. If you have any questions about the service, you can call our UK team on 0800 633 5566.
Who are SunLife and who provides the SunLife Equity Release Service?
SunLife Limited distributes financial products and services. Registered office: 1 Wythall Green Way, Wythall, Birmingham, B47 6WG, United Kingdom. Registered in England and Wales, number 05460862. SunLife Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (reference number: 769427).
SunLife acts as an introducer to Age Lifetime Limited, an appointed representative of Age Partnership Limited. Age Lifetime Limited registered office: 2200 Century Way, Thorpe Park, Leeds, LS15 8ZB, United Kingdom. Registered in England and Wales, number 09476203. Age Lifetime Limited is authorised and regulated by the Financial Conduct Authority (reference number: 681715). Age Partnership Limited registered office: 2200 Century Way, Thorpe Park, Leeds, LS15 8ZB, United Kingdom. Registered in England and Wales, number 05265969. Age Partnership Limited is authorised and regulated by the Financial Conduct Authority (reference number: 425432).