Do I qualify for equity release?

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Checked for accuracy and updated on 27 June 2023

If you are over the age of 55 and own your property in the UK, with little or no mortgage, then you could be eligible for an equity release scheme.

However, there are other considerations before an application can be submitted to any lender offering a lifetime mortgage or home reversion plan.

This criteria is typically split into several categories, which equity release companies use to assess whether you can release money from your home.

Let’s outline what these qualifying rules are.

1. Location of your home

To qualify for equity release, your property must be situated in the UK. It’s also worth noting that certain lenders can impose localised rulings as to whether extremes of the UK are included within their remit. For instance, Northern Ireland is currently restricted to just two providers, some lenders insist that the property must be situated on the mainland, thus ruling out certain islands. The Isle of Man is always excluded, whilst many lifetime mortgage providers accept the Isle of Wight.

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

2. Property criteria

The minimum property value any lender will accept is £70,000. There is theoretically no upper property valuation limit, however, certain lenders will impose maximum values to protect themselves from risk. Typically, the bigger insurance companies, such as Aviva, Legal & General and LV=, will consider properties upwards of £1 million.

The condition of your property is something all lenders will take seriously, and they will expect your home to be in good condition and maintained accordingly. For example, if there is evidence of substantial clutter in your home, or it clearly needs essential repairs, lenders could decline your application.

3. Age of homeowners

At present, the youngest age at which any person can take out a lifetime mortgage is 55, however some lenders require the applicant to be 60 years of age. The age of the youngest homeowner always forms the basis of the equity release calculation.

As the minimum age can differ from plan to plan, you should always check with one of our advisers to ascertain beforehand whether eligibility may be an issue.

4. Loan amount

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 more prestige schemes.

The maximum you can borrow is based on the age of the youngest person in the property, their health and lifestyle, and, of course, the property value. The older the individual, the higher the maximum equity release loan can be taken. At Equity Release Supermarket, our advisers will only ever recommend the initial loan that is sufficient to meet your planned objectives – as should be the case wherever you seek professional advice.

It’s also worth noting that before calculating how much equity can be released, any outstanding mortgage must be repaid. The mortgage can either be redeemed before the application stage, or at the time the equity is released by using these funds to clear the outstanding mortgage amount. Your solicitor will arrange this for you, therefore removing the need for you to pay the funds directly to your mortgage provider.

You can use our Equity Release Calculator, below, to establish the maximum loan available.

5. Credit history

Equity release products by their very nature mean that no repayments are required. This means that lending criteria can be more relaxed than when applying for residential mortgages.

However, the issue of whether poor credit will stop someone from applying for an equity release plan depends entirely on the severity of the situation as well as the lenders terms and conditions. For instance, some lifetime mortgage plans, starting from age 55, there are certain lenders that do not undertake any form of credit check.

As with all the above criteria, your eligibility will entirely depend on your circumstances.