Our equity release experts have put together some information to help you get started and understand some of the criteria surrounding equity release, and if you could be eligible for equity release.
What is the equity release eligibility criteria?
If you’re looking to release equity from your home, there is an eligibility criteria you must meet. This can vary between different equity release plans and providers.
The eligibility criteria in place can include a range of personal details, all of which will be covered by your equity release adviser during your consultations.
Each question you are asked by your adviser will help narrow down which equity release scheme you are eligible for and which will suit your personal circumstances.
The topics your financial adviser will cover includes the property value, if you meet the minimum and maximum age requirement and if your property meets the criteria, this can include location and habitability. These discussions will help your adviser decide if equity release is right for you, and if so, help to pair you to a suitable product from an equity release provider.
Am I eligible for equity release?
If you’re considering equity release, it’s important to seek independent financial advice.
Our independent equity release advisers offer impartial advice to help you consider your options and understand how much equity you could release from your home.
Our equity release specialists are on hand to help you understand the eligibility criteria and equity release process, so you can move forward informed.
Get started today and find out how much equity you could release from your home with our free online equity release calculator.
Eligibility criteria for equity release
Equity release is a way to release tax free cash from your home through a lifetime mortgage or home reversion plan.
If you’re looking to release equity from your home, there is a criteria to allow you to qualify for equity release. This criteria includes a minimum age and upper age limit, minimum value of your home, and your property type.
You must own your property and it needs to be valued at £70,000 or more. The property must be in the UK (including Northern Ireland), it should be your main residence, be of standard construction and in good condition.
- 55+
- £70,000+
- 75+ years left on the lease if leasehold
- The property must be your main residence
- The property must be in a good, habitable condition
If you have less than the required lease or are unsure if you meet the criteria, speak to your adviser to discuss your options in detail.
Age Requirements
If you are looking to release money through equity release and do not own your property with anyone else, you must be aged 55 or over to be eligible for equity release.
If you are taking out an equity release plan jointly (whether you are married, in a civil partnership or cohabiting) then you must both be 55 or over. Your spouse or partner will then have the right to live in the property for as long as they want, should you pass away or move into long-term care.
During your consultations with your adviser, they will be able to discuss your eligibility for each type of equity release including lifetime mortgages and home reversion plans.
Property Requirements
To be eligible for equity release, you must be a UK homeowner, and the minimum property value must be £70,000 or more.
The property must be in the UK (including Northern Ireland), it should be your main residence, be of standard construction and in good condition.
Most houses in the UK are freehold, however, if you own a leasehold property, your eligibility may be affected.
Your adviser will discuss how long is left on your lease and how this will impact your options with equity release.
In addition to it’s value, your property condition must be good and habitable. This means you must have a functional kitchen the home must generally be in a good state of repair.
If you have spray foam insulation in your home, your equity release application may be denied, or your options may be limited. Your adviser will be able to discuss your options, and which plans may accept spray foam insulation or if you may be required to remove it before you can release equity from your home.
Another thing that may affect your eligibility for equity release is your proximity to commercial properties. Your equity release adviser will discuss in detail your proximity and how this may affect which plans are available to you.
Mortgage and credit requirements
To release cash from your property with an equity release plan you need to be able to release enough equity to fully pay off any outstanding mortgage or secured loan, or have enough funds by other means to do this. After that, the remaining money is yours to spend however you choose tax free.
If you’re thinking about releasing equity from your home but have a poor credit history, you may still be eligible for equity release as you are not obliged to make regular repayments towards your loan.
Can I release equity with poor health?
Some equity release providers offer tailored equity release products for individuals aged 55 and over with certain lifestyle factors or health conditions.
Applicants who are eligible for enhanced lifetime mortgages are typically able to release more equity from their home with a lower interest rate.
If you are entitled to any means tested benefits, our advisers will discuss the impact equity release may have on your eligibility.
Types of Equity Release Schemes
There are two main types of equity release schemes: lifetime mortgages and home reversion plans.
Lifetime Mortgage
A lifetime mortgage is a loan secured against your home that allows you to maintain ownership of your home until the home is sold when the last borrower passes away or moves into long term care.
There is no obligation to make repayments, however if you choose to pay back the capital of the loan, early repayment charges may apply.
Home Reversion
A Home Reversion plan is an equity release scheme designed to allow you to sell part, or all of your home to a provider whilst remaining in the property ‘rent-free’ until you pass away or move into long term care.
Speak with our expert advisers to understand your eligibility
If you’re considering equity release, speak to our advisers today to receive professional advice and to understand your eligibility.
Our independent advisers will discuss the advantages and disadvantages of equity release including the impact on your estate and how it may affect your entitlement to means tested benefits.
Offering whole of market advice, our team can compare plans from a range of equity release lenders to help you find the right product for your circumstances.
Get started today with our free equity release calculator to see how much you could release from your home.
At Bower, we will understand your unique circumstances and advise you to ensure you are receiving the best plan to meet your objectives. There are plans that allow you to make voluntary repayments and move home, subject to lender criteria. However, early repayment charges may apply in certain circumstances.
Equity release requires paying off any existing mortgage. Any money released, plus accrued interest to be repaid upon death, or moving into long-term care. Equity release will reduce the value of your estate and your entitlement to means-tested benefits now or in the future, and impact long-term care funding.
Bower Home Finance provides independent, impartial whole of market advice with an award-winning customer service experience. Initial advice is provided at no cost to you and without obligation. Only if you choose to proceed and your plan completes, would a typical advice and administration fee of £1,695 be payable.
If you are considering equity release, we strongly recommend that you read our equity release page carefully and talk to one of our specialists before deciding if you wish to proceed.
To find out more about any of the products and the service we provide, please call us on freephone 0800 411 8668, request a call back, email us, or join our live chat you’ll find on our website.
Please be aware that equity release may involve a home reversion plan or lifetime mortgage which is secured against your property. All features and risks are thoroughly explained in your free personalised illustration.
