Equity Release Eligibility Rules Explained

Equity release scheme loans let you take out a lump sum of money against the equity in your property.

Because you’ll already been a homeowner, there are few other criteria you need to fulfil. .

What Are the Two Main Equity Release Eligibility Rules?

The main eligibility rules for equity release are that you must be 55 or older, and have equity tied up in a property that must be worth at least £70,000. Other factors that impact the resale value of your home can apply.

Continue reading for the full details of Equity Release eligibility.

Looking for other information on Equity Release? This guide has info on 'Equity release mortgage qualification' We have also written extensively about:

• - Equity release eligibility explained
• - Equity release early repayment charges explained
• - Top 10 equity release facts

We update all our guides regularly. If you are researching Equity Release and we haven't got an exact guide that helps you, keep coming back as we update daily.

The Main Equity Release Eligibility Criteria

Equity release loans are available to anyone aged 55 or older, if you choose a lifetime mortgage, although some lenders might apply a 60 year age limit. Lenders will sometimes put an upper age limit on their scheme too, usually around 90.

Be aware that the older you are, the more money you’ll be able to borrow, and you’ll have fewer years for interest to accrue too. Also, if you’re applying for a joint-equity release loan on a property owned by you and your partner, the minimum age applies to the younger of you.

If you’d rather go down the home reversion route, where you sell your home to the lender (while retaining the right to live there), there’s usually a lower age limit of 65 years.

You also need to own your home and have little to no mortgage left to pay, and your home must be worth at least £70,000. Fulfil these criteria and most lenders will consider you, but you’ll also need to seek financial advice before you speak to a lender otherwise they won’t want to take you on – penalties for offering equity release loans to unsuitable customers can be high.

Equity Release: Other Factors That May Be Considered

Some lenders may have more strict criteria, including looking at the location and condition of your home. If your property is too close to commercial buildings, or it’s in a known flood risk spot, then the lender may decide it’s not worth the risk.

Also, if the independent surveyor that values your home has any concerns about the current condition of the building, or they find any evidence that you’re unlikely to maintain it properly, the lender might also pull their offer.

Remember that they’re looking to recoup the value of the loan from the sale of your property – if they have any concerns they won’t be able to do that, then the loan doesn’t suit them.

One thing you shouldn’t need to worry about is your credit history – as the loan is secured against your home, any past issues with credit won’t be a concern to the lender. Some lenders might query it, but there are plenty of lenders who will be able to offer you equity release even if you’ve had CCJs.

Now you know whether you’re likely to be eligible, you can read our further guides on equity release to learn more about the scheme.

How Can Money Savings Advice Help You With Releasing Equity?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Equity Release brokers. They have already helped thousands of people get the best Equity Release deal and they can do the same for you.

Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.