How Does Equity Release Affect Inheritance?

A lifetime mortgage is secured against your home and is normally repaid from the property when the plan ends. This means it will usually reduce the value left in your estate compared with owning the same property without the mortgage.

Why the balance can grow

If interest is not paid, it is added to the mortgage and future interest is charged on the increased balance. This compounding effect can become significant over a long period.

Ways to manage the effect

Depending on the product and your circumstances, you may be able to borrow less initially, use a drawdown facility, make voluntary payments or service some or all of the interest.

Inheritance protection

Some products offer features designed to ring-fence a proportion of the property’s future value, but this can reduce the amount available to borrow. Product terms vary.

Family members can be involved in discussions where you want them involved, but the advice and decision remain yours.

Reviewed by David Farrell. Last reviewed: 3rd October 2026.