How Much Can You Borrow Through Equity Release?

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Written by Daniel Tannenbaum on August 25, 2021

Updated September 2, 2021

With equity release, you can borrow 20%-60% of your property’s value. The precise amount you’ll be able to borrow will depend on various different factors; for example, if you’re around 55-65 the amount you’ll be able to borrow is closer to 20%, but the older you get the more you’ll be able to borrow.

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What Impacts the Amount I Can Borrow Through Equity Release?

  • The value and condition of the property
  • Your age and health
  • Your outstanding debts

The value and condition of the property is an important factor that can affect how much you’ll be able to release, the lender ideally needing the security to either maintain or increase its value for the end of the loan term. Factors that could affect this include the materials of the building, the type of property, its potential growth, and the average house values in the area.

Your age and health also have an impact on the amount you’ll be able to borrow. Equity release plans are only available to people over a certain age – you can only borrow equity release if you’re 55 or over.

If you’re towards the minimum age requirement for this type of loan, you’ll usually find that you can only take out smaller amounts. This is because the older you get, the closer the lender is to being repaid, this done once the borrower has moved into long-term care or has passed away.

If you’re around 55 years old, the most you’ll typically be able to take out as equity release is 28% your property’s value, whereas someone who’s in their 70s-80s could be eligible to take out larger amounts, such as 50% or 60% their property’s value.

Additionally, if you have ongoing medical conditions your health status might be taken into account, which could enable you to release different percentages than those in your age category.

Equity release providers will also need to consider any outstanding debts applicants have, as any and all debts, both secured and unsecured, will ideally have to be cleared in order to proceed with the equity release.

 

How Much Equity Release Can I Get?

Below, we’ve provided a table for you to assess how much equity release you could potentially get based on your age and the value of your home:

 

Age
Value of your home
£150,000 £200,000 £300,000 £400,000 £500,000
55 £36,000 £48,000 £72,000 £96,000 £120,000
60 £44,250 £59,000 £88,500 £118,000 £147,500
65 £52,650 £70,200 £105,300 £140,400 £175,500
70 £61,650 £82,200 £123,300 £164,400 £205,500
75 £70,650 £94,200 £141,300 £188,400 £235,500
80 £77,400 £103,200 £154,800 £206,400 £258,000
85+ £81,150 £108,200 £162,300 £216,400 £270,500

 

Can I Release More Money if I Already Have Equity Release?

You could still release more money, even if you’ve already got an equity release plan.

If you want to release more money, you’ll have to speak with your equity release provider, as they’ll be able to discuss this with you and check to see whether you’re eligible for more.

If attempting to release more money when you already have an equity release plan, as with any loan, it’s important that you understand all the obligations, fees, and consequences of releasing more money to help you make an informed decision on this.

 

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How Much Do I Repay with Equity Release?

With equity release you’ll typically be charged 3% interest each month or have this rolled-up for the loan term end.

There are ways you can bring down the overall sum of what’s owed at the end of the loan term, including interest-only lifetime mortgages. With this type of borrowing, you’ll need to pay a monthly interest, which subsequently brings down what’s owed at the end of the loan term, meaning you can leave more as inheritance to your children.

 

Can I Borrow Equity Release if I’m Under 55?

No, the minimum age requirement to borrow equity release is 55 years old. If you’re under 55 there are a range of equity release alternatives you may want to consider, including the following:

• Remortgage
• Sell an asset(s)
• Downsize to a cheaper property
• Rent a room out

Alternatively, if you’re approaching the minimum age limit for equity release (55), feel that this is the right option for you and are able to wait until you meet this requirement, it might be worth simply putting this off and applying once you’ve reached this age.

To discuss your equity release requirements today, you can get a free and impartial quote from Lending Expert here >>

 

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