Understanding Home Equity Release: Types, Eligibility, and Calculation Methods

Learn about different home equity release options, eligibility criteria, and how to estimate borrowing potential. This guide covers lifetime mortgages and home reversion plans, emphasizing the importance of professional advice to make informed financial decisions. Suitable for homeowners aged 55+, it highlights key considerations and calculation tools to assist in planning.

Home equity release allows homeowners to unlock a portion of their property’s value in tax-free cash without relocating. Suitable for those aged 55 and above, this option can help fund life events, home improvements, debt repayment, or supplement retirement income. Typically, the borrowed amount and interest are repaid through future sale of the home. There are mainly two types: lifetime mortgages and home reversion plans. Eligibility criteria are set by the Equity Release Council, including age, property value, and ownership status. Using online calculators can help estimate potential borrowing amounts, but professional advice is strongly recommended before proceeding.