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How to release equity from your home

'How can I release money from my house?' You’ve probably heard there’s a way, but maybe you’re not sure how it works. It’s called equity release. And the good news is it’s simpler than you might think to unlock tax-free cash from your home to enjoy in retirement.

What is equity release?

We’ve written a handy article on how equity release works, but here’s a quick recap for you.

Your home is probably worth more than what’s left to pay on your mortgage. This difference between market value and loan value is called ‘equity’. It’s effectively cash locked up in your home – and there are a number of ways you can ‘release’ it.

Many people turn to equity release as a way of boosting the money they have available in retirement, preferring to access cash now rather than leaving it locked up in their property.

If you’re wondering how to release equity in your home, here are your options.

How do you release equity from your house?

Lifetime mortgage

A lifetime mortgage is the most popular way of releasing equity from your house. If you’re age 55 or over, depending on your age and house value, you could borrow up to 60% of the value of your home as tax-free cash – either as one lump sum or as smaller amounts over time.

Unlike a normal mortgage, you don’t have to make any monthly repayments. Instead, the interest is added to your loan and it’s all paid off through the sale of your home when you pass away or move into permanent care.

Find out more about lifetime mortgages and, if you think you might like to go ahead, we’ll put you in touch with an independent Age Partnership financial adviser who’ll explain everything first.

a mature couple laughing whilst looking at a tablet

Other ways of releasing equity from your house

When we talk about equity release we usually mean a lifetime mortgage, but it’s worth taking a quick look at other ways to unlock the value in your home.

Selling up

Downsizing essentially means selling your property, using your equity to buy a cheaper property and then cashing in on what’s left over once all costs are covered. The new property is yours to do what you want with and it can be left for your family to inherit when you pass away. Although, you should consider the following.

Cost of moving

Moving can often cost more than people think. A portion of the money you get from selling will need to be allocated to estate agent fees, legal fees, stamp duty and moving costs, which when added up can be pretty substantial.

Emotional upheaval

If you’ve lived in your home for sometime, packing up and leaving your memories behind might be too overwhelming and stressful. It’s important to give yourself plenty of time to consider what’s best for you.

different sized wooden houses sitting on the grass

Borrowing more

You could raise the lump sum of cash you need by remortgaging, where you’re essentially borrowing against the value of your equity. If your home’s gone up significantly in value since you bought it, accessing some of the value then looking for a better mortgage rate could be an option, particularly if you have a good regular income. But before you remortgage for extra cash, think carefully about two key factors.

Costs

Make sure you’re happy with the size of your new mortgage repayments as your home may be repossessed if you don’t keep up with your repayments. And what fees are there to exit your existing mortgage agreement and start a new one?

Getting accepted

You will need to go through the standard mortgage application process and if you’re approaching retirement, lenders can be less likely to lend or you could be offered a mortgage on a restricted term.

reading glasses and a pen sitting on a mortgage application form

Is a lifetime mortgage right for you?

Releasing equity from your house may be right for you if…

  • You’re looking to use the value of your property to enjoy your home in retirement
  • You want to boost your pension income, or benefit from a tax-free cash sum
  • You want the security of knowing you’ll never owe more than the value of your home

You may want to explore other options if…

  • You’d rather not reduce the amount of inheritance you could leave to loved ones
  • You don’t want to affect your entitlement to state benefits – such as pension credit, savings credit or even council tax benefit
  • You don’t qualify for a lifetime mortgage (it’s not available on all properties and you need to be age 55 or over)

Whenever you’re ready, we’re here for you

For more information and to check your eligibility, call The SunLife Over 55 Equity Release Service today on 0800 633 5566 or request a call back.

SunLife offers a range of straightforward and affordable products including over 50s life insurance, funeral plans, life insurance, equity release, pet insurance, home insurance, car insurance, ISAs and Will writing services

Here's the information that you need to know about who we are and the other companies that we work with in order to provide our products and services.

Who are SunLife? 

Phoenix Life Limited trades as SunLife and is the provider of the Guaranteed Over 50 Plan, SunLife Insurance and the life insurance policy payment option for Funeral Plans. Phoenix Life Limited’s registered office is at 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 1016269). Phoenix Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is entered on the Financial Services Register (registration no. 110418). As part of SunLife’s commitment to quality service and security, telephone calls may be recorded.

SunLife Limited distributes financial products and services and is a company limited by shares, registered office: 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 05460862). SunLife Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (registration no. 769427).

You can contact us by post at SunLife, PO Box 1395, Peterborough, PE2 2TR or by phone on 0800 008 6060.

If you choose to add Funeral Benefit Option to your Guaranteed Over 50 Plan the funeral services are arranged and provided by Dignity Funerals Limited. Dignity Funerals Limited is a company registered in England and Wales No. 00041598. VAT registered No. 486 6081 14. 4 King Edwards Court, King Edwards Square, Sutton Coldfield, West Midlands, B73 6AP. Telephone No. 0121 354 1557. Fax No. 0121 355 808. Part of Dignity plc. A British Company. Dignity is not authorised or regulated for this activity by the Financial Conduct Authority or the Prudential Regulation Authority but is a member of the National Association of Funeral Directors.

Who provides the Funeral Plans?

The funeral services are arranged and provided by Dignity Funerals Ltd which is not authorised or regulated for this activity by the Financial Conduct Authority or the Prudential Regulation Authority but is a member of the National Association of Funeral Directors.

The life insurance policy that pays for your funeral will be provided by Phoenix Life Limited, trading as SunLife.

Who provides My Smarter (ISA)?

My Smarter (ISA) is provided by Scottish Friendly Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority. Details can be found on the Financial Services register, registration No. 188832. Member of The Investment Association. Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ.

Who provides the Will writing services?

Hugh James is authorised and regulated by the Solicitors Regulation Authority (SRA Number:303202).

The information contained on this website is based on Hugh James' understanding of the law of intestacy in England and Wales only as at April 2014. The law in Scotland and Northern Ireland is significantly different. This is for information purposes and is not intended to be legal advice.

Who provides Family Life Insurance?

SunLife Family Life Insurance is provided by Scottish Friendly Assurance Society Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Details can be found on the Financial Services register (registration number 110002). Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ. 

Who provides SunLife Pet Insurance

SunLife Pet Insurance is arranged and administered by BDML Connect Limited. BDML Connect Limited is authorised and regulated by the Financial Conduct Authority (No. 309140). Registered in England and Wales Number 02785540. Registered Office: 45 Westerham Road, Bessels Green, Sevenoaks, Kent, TN13 2QB.

Who provides SunLife Home Insurance

SunLife Home Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.

Who provides SunLife Car Insurance

SunLife Car Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.