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What's Equity Release?
Equity release is a term for a type of product that allows you to unlock some of the value of your home.
Benefiting from your home value through equity release can be done by opting for either a lifetime mortgage or a home reversion scheme.
The money received is untaxed, and no repayments are usually required during your lifetime.

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How Much Equity Can You Release?



Bert Hofhuis
In his long professional career, Bert has worked with multinational companies and governments, consulting on various financial and logistical projects in Africa, Europe and Asia.
He founded TimeBank with a team of experienced finance writers and experts to help demystify topics such as equity release, lifetime mortgages, home reversions and retirement interest only mortgages, for people like himself.


Paul Derek Sawyer
Paul is currently the Director of Alpha Capital Compliance Limited. A compliance company offering a no-nonsense approach to financial compliance.
His experience spans regulatory updates, compliance auditing and due diligence, among other specialities in the UK finance space.
Founder:

Bert Hofhuis
In his long professional career, Bert has worked with multinational companies and governments, consulting on various financial and logistical projects in Africa, Europe and Asia.
He founded TimeBank with a team of experienced finance writers and experts to help demystify topics such as equity release, lifetime mortgages, home reversions and retirement interest only mortgages, for people like himself.


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How Much Equity Can You Release?
Equity release is a financial product that enables homeowners who are at least 55 years old to release some of the value tied up in their property.
This can be done either through a lifetime mortgage or a home reversion plan.
This article explores the following topics, drawing on our expertise in the field:
With a lifetime mortgage, you borrow against the equity in your home and receive a tax-free lump sum or access to a drawdown facility.
The amount borrowed, including any interest accrued, is repaid when the property is sold or the homeowner passes away.
With a home reversion plan, you sell a portion of your property to a provider in exchange for a tax-free lump sum.
You continue to live in the property until you die or move into long-term care, at which point the provider sells the property and takes their share of the proceeds.
How an Equity Release Calculator Works
An equity release calculator is an online tool designed to estimate how much equity you could unlock from your home.
It provides a rough indication of the potential loan amount based on a few key inputs.
To use an equity release calculator, you typically need to provide:
- Your age.
- Property value.
- Outstanding mortgage or secured loans.
How Much Equity Can You Release?
The amount of equity you can release depends on several personal and financial factors.
These include:
- Age of the Applicant: Age is one of the most important determinants. Generally, the older you are, the more you can release.
- Property Value and Location: The higher the value of your home, the more equity you’ll be able to access.
- Existing Mortgage or Secured Loans: If you have an outstanding mortgage or secured debt, this will reduce the equity you have in your home and therefore the amount you can access.
- Type of Equity Release (Lifetime Mortgage or Home Reversion): Lifetime mortgages allow you to retain full ownership of your home while borrowing against its value. The amount available depends on your age, home value, and lender terms. Home reversion plans involve selling a portion (or all) of your property in exchange for cash. The amount you receive is typically lower than market value, reflecting the provider’s long-term investment.
Speak to a qualified equity release advisor to discuss how much you may be able to access.
Understanding the Results
An equity release calculator provides an estimate of how much equity you could unlock, but this figure should be interpreted carefully.
The estimated amount is not a guaranteed offer but an approximation based on your input.
The estimate also will not account for all fees or interest costs, which can impact the final amount.
Each provider uses different assumptions when calculating results, and comparing multiple tools can give you a broader view of potential loan amounts.
Remember
Because calculator estimates are indicative, it is essential to consult a financial adviser before making any decisions.
Advisers can provide a personalised assessment, explain the long-term impact of equity release, and ensure you choose the right product for your needs.
Professional Advice
Seeking professional financial advice is crucial before proceeding with equity release.
A financial adviser can:
- Assess whether equity release is the best solution for your situation.
- Explain the long-term financial impact, including costs and interest accrual.
- Help you explore alternative options, such as downsizing or remortgaging.
Unlike online calculators, an adviser can factor in your financial goals, inheritance plans, and eligibility for means-tested benefits.
They can also recommend providers that may suit your specific needs.
Next Steps After Using an Equity Release Calculator
After obtaining an estimate, there are several steps to take before committing to equity release.
The first step is speaking to a qualified equity release advisor to discuss your equity release options.
After this, discuss your intentions with your family and consider whether alternatives to equity release may be more suitable.
If you and your provider decide that equity release would be the best solution for you, you’ll have to decide on a plan type.
The next step is to request formal quotations from equity release providers. These quotes will be based on a full property valuation and a detailed assessment of your circumstances.
Common Questions
How Accurate Is an Equity Release Calculator?
How accurate an equity release calculator is depends on the quality of the tool and the data entered.
Equity release calculators provide an estimate of how much equity a homeowner may release based on factors such as age, property value, and existing mortgage balance.
While these calculators use standard provider criteria, they do not account for individual circumstances, such as health conditions or specific lender policies.
The results are indicative rather than definitive, and actual offers may vary.
To obtain a precise figure, homeowners should seek professional advice and undergo a formal property valuation from an equity release provider.
Why Do Different Equity Release Calculators Give Different Results?
Different equity release calculators give different results because of variations in provider criteria, interest rates, and calculation methodologies.
Each lender has different eligibility criteria and maximum loan-to-value ratios, which affect the estimated amount that can be released.
Some calculators use general industry averages, while others are tailored to specific equity release providers, leading to discrepancies in results.
For the most reliable figure, homeowners should compare multiple calculators and consult a regulated equity release adviser.
In Conclusion
Start your journey to a comfortable retirement by using our free equity release calculator now.
Don’t forget to seek advice from a financial adviser before making a final decision.
What are you waiting for? Try our equity release calculator for free today!
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How Much Equity Can You Release?