Do I qualify for and can I get equity release?

Mark Gregory

Checked for accuracy and updated on 25 November 2024

To qualify for and to be able to get equity release, you must meet four, very simple eligibility criteria. These are:

• You are over 55.
• You are a homeowner and you own property in the UK.
• Your property is worth a minimum of £70,000.
• You have little or no mortgage left on your property.

And that’s broadly it! There are a few other details a lender will consider when reviewing your application and eligibility for an equity release plan. To understand better if you’ll qualify and be able to get equity release, let’s look at these in turn.

1. Location of your home

To qualify for equity release, your property must be located in the UK. It’s also the lenders decision if they want to lend depending on where you live. For example, there are currently only two lenders that will consider Northern Ireland, while other lenders insist that the property is situated on the mainland, which excludes certain islands. For example, The Isle of Man is always excluded, whilst most equity release providers will accept the Isle of Wight.

Always check with your Equity Release Supermarket adviser to understand if the location of your property could be a potential issue.

2. Your home's value and condition

For you to get equity release, the minimum property value any lender will accept is £70,000. There is theoretically no upper property valuation limit, but having said that, some lenders do impose maximum values to protect themselves from risk. For example, the bigger insurance companies, such as Aviva, Legal & General, Canada Life and LV=, will consider properties upwards of £5 million. You can compare all the latest deals now.

The condition of your property is something all lenders will take seriously. They will expect your home to be in good condition and maintained to a good standard. For example, if there is evidence of substantial clutter in your home, or it clearly needs essential repairs, lenders could decline your application or insist that repairs are made before they will consider your equity release application.

3. Your age

The youngest homeowner must be at least 55 to qualify for and get a lifetime mortgage – the most popular type of equity release plan. That said, some lenders require the youngest applicant to be at least 60. The age of the youngest homeowner always forms the basis of the equity release calculation.

If you or your partner are under 55, it is still possible to get equity release. For instance, certain RIO mortgage providers will accept applications from age 50, however the amount you can borrow is dependent upon your income.

Lenders apply different criteria, but there are some equity release lenders that will consider you, subject to the partner under 55 being taken off the deeds to the property. The partner under 55 must have independent legal advice and sign a waiver, which would incur additional legal costs.

If one of you is under 55, equity release should only be considered under exceptional circumstances as the partner could end up with no home, should the other die or move into long-term care. If either of you are under 55, then there are alternative ways of raising money you could look at.

4. How much money you need

The minimum initial loan amount for a lifetime mortgage is £10,000, however, some lenders set this at £15,000, or even £100,000 on plans for those with high value properties.

The maximum you can borrow with equity release is based on the age of the youngest homeowner, their health and lifestyle, and, of course, the property’s value. The older you or your partner, the more you could borrow. At Equity Release Supermarket, our advisers will only ever recommend the initial loan that meets your needs, and this should be the case wherever you seek professional advice. Why not use our calculator to get an idea of the maximum you could borrow?

It’s also worth remembering that you must repay any outstanding mortgage on your property before you can get equity release. The mortgage must either be repaid before you apply, or at the time the equity is released by using these funds to clear the outstanding mortgage. Your solicitor will arrange this for you, therefore removing the need for you to pay the funds directly to your mortgage provider.

5. Your credit history

One of the great advantages of equity release above traditional mortgages or retirement interest-only (RIO) or retirement mortgages is that the lender doesn’t consider your income or expenditure. This is simply because you don’t need to make any repayments with lifetime mortgages, but even if you do choose to, lifetime mortgages come with no affordability assessments.

Lenders are also more relaxed if you have a poor credit history, but this depends entirely on the severity of the situation as well as the lenders terms and conditions to qualify. For example, if you are bankrupt, you won’t be able to get equity release, but you will still be eligible with an adverse credit history and CCJs – just fewer lenders will consider you.