Equity Release Mortgage Calculator

  • Calculate what you could release as a tax-free lump sum today.
  • Try our equity release calculator, it’s free!

Equity Release Mortgage Calculator

  • Calculate what you could release as a tax-free lump sum today.
  • Try our equity release calculator, it’s free!
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Author: Carl Shave - CEO and co-founder
Last updated: 21 Jun 2024

What is equity release?

Equity release schemes are typically used by older homeowners – usually over 55 or 60. They allow you to release cash tied up in the value of your home.

The most common type of equity release plan is the lifetime mortgage. This lets homeowners borrow money that is then secured against their property.

With a lifetime mortgage, the borrower doesn’t have to make monthly repayments to the lender. Instead, the amount borrowed and the interest, is paid back after the sale of the property. Usually when the homeowner dies or moves into a residential care home.

Lifetime mortgage products vary between lenders. Certain products will release the equity as a single lump sum. While other products may allow smaller equity releases to be drawn down over time. Also, some products may offer the ability to make payments towards the accruing interest.

There is another type of equity release scheme, known as a home reversion plan. Home reversion involves selling a percentage of your home at a price below market value, to the plan provider. The percentage sold will be anywhere from 25% to 100%.

This is in exchange for a lump sum or a regular income, and in some cases a combination of both. With a home reversion plan, you can continue to live in your home without having to pay either rent or mortgage repayments. When the property is sold, the lender is then paid the corresponding percentage of the proceeds.

How much can I borrow with equity release?

Providing you have met the necessary criteria; you can typically borrow between 20% and 60% of your property’s value. However, everyone is different, and your circumstances will affect the amount.

Some factors that will influence this are:

  • Your age
  • The current value of your property
  • Your health
  • The condition and type of your property
  • If there’s any debt secured against your home e.g., secured loan

As always, if you’re unsure about your own circumstances, get in touch today.

Is equity release right for me?

Both equity schemes mentioned provide the advantage of providing a tax-free lump sum or income upon which you do not have to make any repayments within your lifetime.

However, equity release isn’t right for everyone. It can be a relatively costly way of borrowing money in comparison with other types of secured lending. Although the equity release itself is tax-free, it can affect your entitlement to some means-tested benefits.

Please note that the figure provided by our online calculator is for illustrative purposes only. The actual amount you could borrow can and will vary from lender to lender. It can also be influenced by other factors such as your health.

If you’re unsure about your equity release plans, get in touch and we can refer you on to one of our trained advisors with our trusted business partners. You can call us today on 01473 356 284 or alternatively, fill out our contact form and we will call you.