How does equity release work?

21st June 2022

Equity release is a way of unlocking the capital from your home without having to move. Available for homeowners aged 55 or over, equity release is a long-term loan that can be claimed, tax-free, as one big cash lump sum or as several smaller lump sums.

The main benefit of equity release is that you won’t need to repay the money you’ve released until the last surviving borrower moved out of the home into long-term care or passes away. At that point your home will be sold and the loan settled.

There are two types of equity release. A lifetime mortgage is the most popular type as it enables you to take out a loan that’s secured against your home while you still own it.  A home reversion equity release scheme means you’ll sell all or part of your property and can stay living in it, but as a tenant. You will receive less than the market value of your property when you sell it.

You can pay your equity release loan off early if you want to, but you may have to pay an early repayment charge.

Why choose equity release?

You can use the money you release from your home however you like – here are some of the reasons why people choose to take out equity release:

  • Top up your retirement income
  • Make improvements to your home or adapt it so you can live independently
  • Help your children or grandchildren buy their own home
  • Pay off your mortgage, loans or medical expenses
  • Travel the world, buy a new car or take up a new hobby
  • Manage your estate and leave a living inheritance

Am I eligible for equity release?

If the following criteria applies to you, then you should qualify for equity release:

  • You’re aged 55 or over and a homeowner of a UK property
  • You have a small mortgage or you’re completely mortgage-free
  • You live in your home
  • You’d like to borrow at least £15,000 and you have at least that amount of equity in your home

If equity release sounds like it could be the solution for you, your first step is to call Charters Financial Services on 03454 500200 for expert advice or, for more information, click here.  (

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Buying our first house was extremely stressful as you can imagine, Chawley really made our mortgage journey extremely smooth and I will always be grateful for that! He was extremely professional and held our hand through the process, it was all very new to me but Chawley explained all the steps and insured I understood. I will 100% be recommending him in the further, great guy!

Kloe C

April 2020

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