Updated: April 17, 2023
Equity Release Age Limits
Considering releasing equity in your house but under 55? You do have options! Find out the minimum ages for equity release & what to do next in our guide.
Author: Pete Mugleston - Mortgage Expert, MD
Updated: April 21, 2022
Although there are some age restrictions and limits around certain equity release products, you still have options whether you fall under or over the age threshold of 55.
This guide covers all the details you need to know about how your age will impact your available choices. You’ll also learn about where to get assistance with the process, and the smartest route to getting the best deals.
Keep reading to get a total understanding of this topic or click on a link below to jump to a specific section…
The following topics are covered below...
Is there a minimum or maximum age limit for equity release?
Yes, there can be minimum age limits that apply when you’re looking to release funds from your mortgage equity. There’s not typically any maximum age limit for specific equity release products that applies across the entire market. However, the relevant limit will depend partly on what process you’re using.
If you’re planning on using a lifetime mortgage, you’ll need to be at least 55 years old. For those with a joint mortgage, both of you will need to be 55 or over to qualify for this kind of arrangement. There can be a way around this if the younger homeowner transfers their share of the equity to the older partner.
The minimum age for equity release can be higher if you opt for a home reversion plan. When setting this up, you’ll need to be at least 60 years old to apply.
Although a standard mortgage can come with a maximum age of around 85 (with some going as high as 95), the situation with equity release is different. There’s no strict rules for maximum ages and any limits would just depend on the loan type and structure.
When taking out a lifetime mortgage, this type of finance is designed to end either when you die or move into long-term care. As it’s impossible to put a finite date on a life, the terms are somewhat open-ended. Similarly, with a home reversion plan, the arrangement just runs until the property is eventually sold.
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What to do if you’re under 55
If you’re under 55, perhaps in your 40s or younger, and looking to release equity from your property – you still have options. Although some of the obvious and traditional methods won’t apply due to the minimum age limits, you can deploy some different strategies and leverage the equity in your home.
Here’s some examples of alternative ways to access and release equity if you’re under 55:
- Remortgage: it can be possible to remortgage to release equity from your home. This will involve increasing your loan-to-value (LTV) ratio. But, it can be worthwhile if your home has increased in value. Ideally, it’s better to consider this route if you’re near the end of your mortgage term to avoid early repayment charges.
- Secured loan: this form of borrowing allows you to use your house as security. Then, you can use this homeowner loan to access an agreed sum for a period of time and pay interest on the debt.
- Home improvement loan: if you want to access funds to carry out upgrades or renovations, then this could be a useful solution. It can be secured against your property with no need for extra collateral.
- Personal loan: if you’re still working and only need access to a relatively small amount, then this can be a simple and more affordable course of action. Personal loans are not secured against your property.
- Downsize or move: although this involves moving home, switching to a cheaper location or downsizing to a smaller property can allow you to access some of the equity you’ve built up. Doing this is also exempt from Capital Gains Tax (CGT) if it’s your main residence.
How a broker can help
If you qualify and fall within the right age brackets, equity release can be a brilliant way to access money tied up in your home. There can be lots of options available, but it’s important that you find the right arrangement for your circumstances on the best terms possible.
Using a specialist broker who knows this area of finance and has plenty of experience securing funds through equity release is going to make the whole process much more straightforward. They will be able to assist with your application from start to finish.
Because valuers and solicitors are also involved throughout, an expert broker by your side means that they can help keep all parties on track and make sure everything is dealt with in a timely and efficient manner.
The brokers we work with have existing relationships with suitable lenders. This means they’ll be able to help make sure everything goes smoothly, whilst also finding you the best deal for your situation. Just make an enquiry and we’ll introduce you to an experienced advisor for free.
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Equity release if you’re over 55
Once you’ve reached this age, plenty more options open up. Here’s a breakdown of the main choices you’ll be able to select from:
This is the most popular choice because this can provide you with a decent level of flexibility. And, it can be tailored to your circumstances if you deal with the correct lenders.
Interest accrues over time and will eventually be paid back along with the lump sum or instalment payments you decide to take. The loan is secured against your property and you don’t have to make any repayments while you’re still living. But there is an option to do this if you’d like.
Home reversion plan
You need to be at least 60 years old if you want to proceed with this option (65 with some lenders). Doing this means selling a portion of your property to a reversion provider.
You’ll receive the agreed funds as a lump sum or instalments, however your property won’t be valued at its proper market price. This can make it a less appealing way to access equity, but it can still be worth exploring and discussing with your broker, although most experts recommended lifetime mortgages over these products.
Retirement interest-only (RIO) mortgage
Similar to a lifetime mortgage, but a RIO mortgage works slightly differently. After borrowing, you will have to make monthly payments to cover the interest.
The benefit is that interest doesn’t accrue, so the remaining debt will just be the initial amount that you borrowed. However, this process does involve an affordability assessment to make sure you can keep up with the monthly mortgage payments. So, a fixed retirement income is useful.
You can use our calculator below for an estimate of how much equity you could be able to release from your own property:
Equity Release Calculator
You can use our equity release calculator to work out how much capital you can release from your home. Simply enter your age and the property’s value and the tool will do the rest.
Maximum Equity you could release:
The amount is of your homes value, the maximum most borrowers your age can release.
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Releasing equity if you’re over 70
Luckily, you’ll be able to access all of the options above. Sometimes age can be a limiting factor when it comes to certain types of finance and borrowing. But, equity release receives the opposite treatment. An older age actually reduces the risk for lenders. This reversal in desirable ages works similar to that of retirement annuities.
Your health can also be a factor, and it may be worth looking into enhanced lifetime mortgages. These can allow you to borrow larger amounts of equity if you have certain medical conditions. However, deals and rates can still vary wildly. So, it’s vital you speak with the lenders willing to let you borrow on the most favourable terms.
Things to consider with this type of finance
Although your age may limit or partly determine your options, there are some wider things to think about. Here’s a few points worth considering and discussing with your broker:
- Your motivation: regardless of your age, understanding why you want to access equity can help direct your focus. The reason you need the funds may cancel out some options but potentially open up others.
- Loan-to-value (LTV): the desired ratio will be different to a standard mortgage and can vary significantly amongst lenders. Most will offer a maximum LTV of 50%, but some will go as high as 60%.
- Government benefits: an equity release arrangement can sometimes affect your entitlement to certain benefits. So, it’s always important to discuss this with your advisor if you’re unsure where you might stand.
- Smaller inheritance: depending on your age and what method you decide on, it’s important to factor in how taking these actions could reduce the value of assets you’re looking to pass down.
- Tax implications: although taking money from your mortgage is tax-free, it’s worth thinking about the knock-on effect on your tax position. This process might also reduce the size of your estate, which can mean paying less inheritance tax (IHT). Luckily, your broker will be able to help assess your finances as a whole.
Speak with an equity release expert
Accessing funds locked up in your property can be a really useful tool. However, certain schemes do have various age limits. So, whether you’re over 55 years old or under 55 – you’ll want to discuss all available options with a skilled advisor before moving ahead.
We offer a free broker-matching service. This means we’ll quickly assess your needs and then pair you up with an experienced broker who has local relationships, and plenty of experience securing equity release deals.
All you need to do is call 0808 189 0463 or make an enquiry. We will set up a chat between you and a specialist broker today. It won’t cost you anything for the initial chat and you don’t have to make any commitments.
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Mortgage Expert, MD
About the author
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!