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Throughout this guide, we will focus on the most popular form of equity release, the lifetime mortgage. All lifetime mortgages that we recommend meet the Equity Release Council Standards and afford you extra protection.

How do you calculate equity release?

To calculate the maximum loan available on an equity release plan, you require the age of the youngest homeowner and the property value. Plans start from age 55 when you can release a maximum of 30.9% of your properties value. On average, on each birthday you can release an extra 1%, up to a maximum of 59.28%.

What percentage can you get on equity release?

The age of the youngest homeowner significantly impacts the maximum percentage you can take on an equity release plan. The age provides us with a Loan To Value (LTV) which is the maximum percentage the equity release lender could lend on a property.

Let's look at the maximum percentage that you could release from your property based on your age:

Age of youngest homeowner Maximum percentage of property value which can be released (LTV) with a lifetime mortgage (equity release)
Standard terms Medically enhanced
55 30.9% 43.6%
56 32.2% 44.9%
57 33.4% 46.0%
58 34.7% 47.2%
59 35.9% 48.5%
60 37.4% 49.5%
61 38.4% 50.3%
62 39.4% 51.5%
63 40.4% 52.4%
64 41.3% 53.5%
65 42.3% 54.4%
66 43.3% 54.5%
67 44.3% 54.5%
68 45.3% 54.5%
69 46.3% 54.5%
70 47.2% 54.5%
71 48.2% 54.5%
72 49.2% 54.5%
73 50.2% 55.0%
74 51.2% 56.2%
75 52.1% 56.4%
76 53.1% 56.5%
77 54.1% 56.7%
78 55.1% 56.8%
79 56.1% 57.0%
80 57.0% 57.1%
81 58.0% 57.3%
82 58.2% 57.7%
83 59.3% 57.8%
84 59.3% 57.9%
85 59.3% 57.9%
86 59.3% 57.9%
87 59.3% 57.9%
88 59.3% 57.9%
89 59.3% 57.9%
90 59.3% 57.9%
91 59.3% 57.9%
92 59.3% 57.9%
93 59.3% 57.9%
94 59.3% 57.9%
95 59.3% 57.9%
96 58.5% 57.9%
97 58.5% 57.9%
98 58.5% 57.9%
99 58.5% 57.9%

To find the maximum equity release loan amount, you need to multiply the LTV by your property value.

Examples of lifetime mortgages on a £300,000 house:

At age 55:

Perfect Health - The maximum equity release is £92,700 (£300,000 x 30.9%)
Medically Enhanced - The maximum equity release is £130,800 (£300,000 x 43.6%)

At age 60

Perfect Health - The maximum equity release is £112,200 (£300,000 x 37.4%)
Medically Enhanced - The maximum equity release is £148,500 (£300,000 x 49.5%)

At age 70

Perfect Health - The maximum equity release is £141,600 (£300,000 x 47.2%)
Medically Enhanced - The maximum equity release is £163,500 (£300,000 x 54.5%)

At age 80

Perfect Health - The maximum equity release is £171,000 (£300,000 x 57.0%)
Medically Enhanced - The maximum equity release is £171,300 (£300,000 x 57.1%)

At age 90

Perfect Health - The maximum equity release is £177,840 (£300,000 x 59.3%)
Medically Enhanced - The maximum equity release is £173,700 (£300,000 x 57.9%)

Please note: The figures quoted above are for a standard construction freehold house in England. Should you wish to release more, there may be other financial products available to you, including, a Home Reversion Plan, or a Retirement Interest Only Mortgage. Please contact us for further information surrounding these different types of plan.

It is essential to know that an equity release will need to sit as the sole charge on your property. Therefore you will be required to repay any existing mortgages on your property as part of the equity release. Don't worry, the equity release funds can be used to repay any mortgages, and you will then receive the remaining net sum as cash.

To find out how much you could release, use our equity release calculator; it requires no personal contact information and the results are instant.

What can affect the maximum percentage?

The age of the youngest homeowner has the most significant impact on the maximum percentage you can release; however, this is not the only factor.

Medically underwritten equity release plans

A medically enhanced equity release plan can allow you access to larger release amounts.

With a medically underwritten lifetime mortgage, the lender will take into consideration your health and lifestyle. The lender asks a set of simple questions and will consider how your answers could impact on your life expectancy.

If the lender believes you will live shorter than average, they will anticipate being repaid sooner, and treat you as if you were older.

As you can see in the grid above, the impact on the maximum amount available for medically enhanced plans can be substantial.

The younger that you are, the more significant the impact could be!

Lender fees

With some equity release plans, you may incur an arrangement fee with the lender.

You are not required to pay the arrangement fee up-front. Most lenders allow you to either deduct the arrangement fee from the loan amount or add it.

If you are trying to obtain the maximum amount available, I would suggest adding any arrangement fee to the loan amount.

Equity release plans with cash-back

Some equity release plans also include cash-back. Cash-back can be great as it is in addition to the loan amount, and it does not attract any interest.

The cash-back you receive can be used for anything you wish. However, it can be a great way to help pay for any setup fees associated with your plan.

Some lenders offer you a fixed sum regardless of your release amount. For example, on some Pure Retirement lifetime mortgages, they provide you with £895 cash-back.

However, some lenders provide you with a percentage of the amount released. For example, 2% or even 5% extra.

The grid above does not include any cash-back that you may be able to receive, but our calculator will show you plans including cashback!

Joint vs Single

We have already explored how the maximum equity release available is based on the age of the youngest applicant. However, some lenders offer differing LTVs for joint applications compared to single applications. This could mean that as a couple, you could receive slightly less money than if you were to apply singularly.

I have never liked the fact that some lenders price their plans in this way. However, they have stated that for joint lifetime mortgages, there is a higher chance that the plan will run for longer (and their loan will be repaid later).

Another consideration is the impact of a married couple where the application will be in one name.

The majority of lenders require that if an applicant is married, the equity release application be made in joint names.

But there are times when you may wish to apply in one name only, including:

  • Where the property is already owned in one name;
  • Where the spouse's primary residence is a different property;
  • Where the youngest applicant is below the age of 55 (the minimum age for equity release plans);
  • When one spouse is older, and you wish to apply in one name to obtain more money or a lower interest rate.

Other factors reduce the number of plans available, which could impact on the maximum release amount available to you. These include:

Property construction

The construction of your property can impact on the number of equity release plans available.

Whilst we have seen lenders become much more relaxed with equity release underwriting, there are still limitations on some types of property.

The equity release security, your home, is of paramount concern to all equity release lenders. This is because, for most applicants, the sale proceeds of the property will be the vehicle used to repay the loan in the future.

For this reason, the equity release lender wants to lend on properties which they believe are more likely to sell at fair market value in the future.

If you live in a property which is not built of bricks and stone and does not have a tiled pitched roof, you may find that you cannot access all equity release plans, and therefore you could receive a lower maximum release amount.

Property location

We advise on, and arrange, equity release plans throughout the United Kingdom. If you live on the mainland in England or Wales, you will have access to all equity release plans available.

If you live in Scotland, there may be a reduction in the number of plans available.

There are currently only two lenders who lend on properties in Northern Ireland. Therefore, if you live in Northern Ireland, you can expect to see a lower maximum amount available.

Lastly, if you live on an island off of the mainland, you may find that some lenders do not lend where you live.

If you would like to receive a more accurate calculation of the amounts available to you, and the interest rates applicable, based on where you live, use our equity release calculator.

Plan features

Equity release plans have continued to become more and more flexible over recent years, with new plan features across a range of financial products.

As part of my financial advice, I will discuss what you feel your future holds, and detail plan features which may be beneficial for you to have.

For example, you may live in a large home with high running costs.

While you and your spouse live together, you want to remain in your home. However, if there were just one of you living in the property, you may not want or have the financial means to stay.

A great feature which may be appropriate is to look for a solution which includes a "significant life event exemption".

This exemption allows you repay your existing equity release within three years of the death of the first borrower, or the first borrower moving into long-term care, without incurring an Early Repayment Charge.

Alternatively, you may wish to make repayments towards your lifetime mortgage. Most plans allow you to make voluntary payments without additional charges; however, some plans do not.

As you can see, having the maximum release, or the lowest interest rate may not be the best solution for you. As a part of our financial advice meeting, I will explore all features with you, and recommend a plan that best meets your needs.

Click here to arrange your free consultation.


With all equity release plans, you will be able to have other people living with you. However, if you have a tenancy agreement in place, or are receiving an income from those living with you, it may limit the number of plans available to you.

Second / Holiday homes / Buy-to-let

The equity release calculator on our website is based upon properties which are your primary residency (your main home).

But what if you own a different property on which you wish to take equity release?

The good news is that there are equity release plans which may provide you with the cash you are looking for.

Please find below a grid specifically for properties which are not your primary residency.

Age of youngest homeowner Maximum percentage of property value which can be released (LTV)
Second homes Buy-to-let
55 19.0% 19.0%
56 20.0% 20.0%
57 21.0% 21.0%
58 22.0% 22.0%
59 23.0% 23.0%
60 24.0% 24.0%
61 25.0% 25.0%
62 26.0% 26.0%
63 27.0% 27.0%
64 28.0% 28.0%
65 29.0% 29.0%
66 30.0% 30.0%
67 31.0% 31.0%
68 32.0% 32.0%
69 33.0% 33.0%
70 34.0% 34.0%
71 35.0% 35.0%
72 36.0% 36.0%
73 37.0% 37.0%
74 38.0% 38.0%
75 39.0% 39.0%
76 40.0% 40.0%
77 41.0% 41.0%
78 42.0% 42.0%
79 43.0% 43.0%
80 44.0% 44.0%
81 44.0% 44.0%
82 44.0% 44.0%
83 44.0% 44.0%
84 44.0% 44.0%
85 44.0% 44.0%
86 44.0% 44.0%
87 44.0% 44.0%
88 44.0% 44.0%
89 44.0% 44.0%
90 44.0% 44.0%

Alternatively, we can explore other finance which you could arrange on the properties, for example, a buy-to-let mortgage which requires monthly payments.

What is the typical interest rate on equity release?

Interest rates for lifetime mortgages have continued to decrease over time. But what does a typical interest rate look like?

As a general rule an equity release interest rate below 3% is outstanding, 3% excellent, 4% good, 5% being average, and 6% plus being for more substantial borrowing with the most product features.

Remember: Lifetime mortgage rates can be fixed for life, which means that you can borrow money long term without having to make mandatory monthly payments.

There are currently no other ways of borrowing money similarly at such little cost!

Do you want to find out more? Use our equity release calculator to find out what interest rates you can achieve.

How is equity release interest calculated?

For most equity release plans, interest will be accrued daily and added to the mortgage monthly. On this basis, many lenders express their interest rates as a Monthly Equivalent Rate (or MER for short).

But if you are not planning to make payments, is this the figure that you should be considering?

While showing a 'lower' interest rate may look more attractive, I believe that the MER is usually not the most appropriate interest rate. For this reason, I will always provide you with the Annual Equivalent Rate (AER).

But what's the difference?

Put simply; the AER shows how interest accrues every year that you do not make any payments and your mortgage runs.

Note: Make sure that you understand if the rate you are quoted is MER or AER. You must compare the same type of interest rate on different financial products. I often use the phrase "you shouldn't compare apples to pears".

Equity Release interest calculator

When using our equity release calculator, you not only find out the maximum amount of money that you can release, but also what the interest rate is likely to be.

We include four quotes for you:

  1. The lowest interest rate (and the release available);
  2. The average interest rate (and the release available);
  3. The maximum release amount (and the interest rate);
  4. The maximum medically enhanced release amount (and the interest rate).

Each quote includes a calculation table, showing you how interest accrues over time.

Use our equity release caluclator to find out how interest accrues on plans tailored to you.

Do I qualify for equity release?

If you are a UK homeowner, aged 55 and over, you will likely qualify for equity release.

There are various underwriting factors which lenders take into consideration, including:

  • the Country you live;
  • your age;
  • your property value (there are varying minimum property values by Country);
  • your requested loan amount (there are different minimum / maximum amounts).

Remember, you will also need to clear any existing mortgages/charges on your property as part of the equity release application.

I have written a complete guide on equity release eligibility, which explores eligibility criteria in greater detail.

Compare equity release plans

Now that we have explored the possible maximum release amounts available to you, and discussed the range of interest rates in the market, you may wish to compare the equity release plans individually open to you.

Our equity release calculator provides you with three tailored quotations. To compare the full range of plans available, use our equity release calculator, and you will find out how to access our equity release comparison tool.

Our equity release comparison tool is market leading, and finds the most cost effective equity release plan for the amount you need.

Let's look at a sample extract from an equity release report for a 75-year-old homeowner in England, with a £126,000 freehold house.

Example equity release market report as produced by Money Release

To begin, use our equity release calculator; it requires no personal contact information and the results are instant.

If you have further questions, why not speak with one of our qualified advisors?

Call us on 0207 158 0881 or use our online form to book your FREE consultation.

While a qualified equity release advisor has written this guide, it is not intended to be used as financial nor legal advice and should not be relied upon.

To understand the full features and risks of an Equity Release plan, ask for a personalised illustration.

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