Calculate how much equity you could release from your home

What is equity release?

Your equity is the total market value of your home, minus any mortgage you haven’t yet paid off.

In short, it’s the sum you’d walk away with if you sold the home for cash.

But if you don’t want to sell your property, you may still be able to access a large portion of this money.

If you have paid off most or all of your existing mortgage, you can consider an equity release scheme.

Equity release can provide you with a large sum of money to spend while enabling you to continue living in your home.

It can be useful for covering large expenses later in life, such as long-term care.

However, there are downsides to accessing the value of your home in this way.

How much equity can I release from my home?

Calculations for the amount of equity you could release are based on the maximum percentage of your property value that you can borrow depending on your age.

Below you can see the amount of equity you could release based on your age.

These are estimates only. For more detailed information, it's best to speak to a qualified equity release adviser.

How do I calculate how much equity I can release?

The main equity release calculations used are:

For example, if you are 65 and your property value is £800,000 with an outstanding mortgage of £200,00, the estimated maximum amount of equity you could release would be £310,400 (£800,00 x 38.8%).

How does equity release work?

An equity release provider will provide you with either a lump sum or an income in exchange for part of the value of your home.

This is done by using a type of mortgage, or by selling that portion of your home on the condition that you can continue to live there as long as you wish.

Read on to find out more about these different types of equity release.

What are the benefits of equity release?

The obvious advantage of equity release is that it gives you money to spend now, rather than leaving it locked away in your home.

The lengthy rise in UK house prices means that a large proportion of homeowners’ wealth is in their property, and inaccessible.

If your home has increased in value over the years, equity release allows you to access some of that money to supplement your retirement income, instead of leaving it all to your beneficiaries or to cover long-term care costs.

Is equity release a good idea?

Whether equity release is right for you or not will depend on your circumstances.

Some reasons to consider it include:

• Your other savings and/or sources of income is not enough to meet your retirement needs.

• You don’t want to (or can’t) downsize.

• You don’t mind reducing your family’s inheritance (or you have no beneficiaries).

• An independent financial adviser has told you this option is best for you. 

Some reasons to choose an alternative to equity release include: 

• You can meet your income needs in retirement from other sources.

• You have the opportunity to release money from your home by downsizing.

• You want to preserve as much of your estate as possible for your family to inherit.

• An independent financial adviser has told you this option is not the best one for you. 

Get expert equity release advice

Equity release allows you to access funds from your property while continuing to live in it and offers some financial flexibility in later life.

That being said, it’s crucial to understand the implications of the different equity release options, including how they might affect your estate and overall financial situation.

Carefully consider the benefits and potential drawbacks, such as the impact on inheritance and repayment terms.

By evaluating your choices and how they fit your long-term goals, you can make a well-informed decision supporting your financial wellbeing and future plans.

Unbiased will quickly match you with a qualified equity release adviser for tailored guidance on the most suitable equity release options for your unique circumstances.