Equity release borrowing
The amount available through a lifetime mortgage is not based on property value alone. Age, the value and type of property, the amount requested and sometimes health or lifestyle information can all influence the maximum borrowing. An online calculator can provide a useful starting point, but it cannot check every lender’s criteria.
The age of the youngest applicant is normally central to the calculation. Broadly, older applicants may be offered a higher percentage of the property’s value, although each lender uses its own limits.
A higher property value may support a larger loan, but lenders usually apply minimum and maximum property values as well as loan-to-value limits. The eventual amount is based on the lender’s valuation, which can differ from an estate agent’s estimate.
Construction type, condition, location, lease length, flat roofs, annexes, commercial neighbours, flood risk and former local-authority ownership can affect lender choice. A property declined by one lender may still be acceptable to another.
Some plans may offer enhanced borrowing or different pricing where an applicant has qualifying medical or lifestyle circumstances. This is not available in every case and evidence may be required.
An existing mortgage or other charge secured on the property normally has to be repaid on completion. This means the important figure is not just the gross loan but the amount remaining after repaying existing borrowing and costs.
For example, if a lifetime mortgage offered £100,000 and £70,000 was needed to clear the existing mortgage and costs, the usable cash would be approximately £30,000. The precise figures would be confirmed in a personalised illustration.
Not necessarily. Borrowing more than you need can create unnecessary interest and reduce the amount ultimately left in the estate. A drawdown plan may allow you to take a smaller initial amount and keep an agreed reserve for later. Interest is normally charged only when money is released, although future withdrawals may be charged at the rate available at that time.
It is also worth comparing alternatives such as a conventional mortgage, RIO mortgage, using savings or downsizing. The largest available loan is not automatically the most suitable solution.
A calculator gives an indication. The confirmed amount depends on a full assessment, product availability, lender underwriting and a satisfactory property valuation. Rates and criteria can change, so any initial result should not be treated as a guaranteed offer.
Use the homepage checker for an initial estimate without assuming that equity release is automatically the right answer. We can then compare it with other later-life mortgage options where appropriate.
Important: A lifetime mortgage is secured against your home. It will reduce the value of your estate and may affect entitlement to means-tested benefits. With a mortgage requiring monthly payments, your home may be repossessed if you do not keep up repayments. Advice should be based on your individual circumstances.