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Who is eligible for equity release?

18/03/2022 |  min read

One of the main things you may be pondering as you plan for retirement is whether you are eligible for any budget-boosting financial solutions.

Equity release is an increasingly popular option for those looking to free up funds, but naturally it’s important to check that you are eligible before planning how a tax-free cash injection could transform your later years.

The eligibility criteria for equity release centre largely around your age, property value, current mortgage, and the amount you’d like to release. To make these criteria as simple to understand as they should be, we have answered a number of common questions about eligibility for equity release below.

What type of property do I have to have to release equity?

To be eligible for a Lifetime Mortgage, the UK’s most popular equity release tool, you must own or intend to own a UK property worth at least £70,000.

Your property does not have to be mortgage-free, but if there is a remaining mortgage you must be able to clear it upon completion of releasing equity. This can be done with the funds you release or other savings you may have.

You may also be eligible to release equity on a leasehold property, although the lender might have additional criteria for you to meet to reassure them that your property can be sold upon the expiry of your Lifetime Mortgage. A meeting with one of our fully qualified advisers is your best port of call should you wish to find out more about releasing equity from a leasehold.

At what age am I eligible to release equity?

You must be aged 55 or over to release equity from your home. If you are under 55 then you will not be able to release equity with a Lifetime Mortgage, but this changes as soon as you turn 55.

If you are making a joint application, both applicants must meet the minimum age criteria.

How much equity will I be eligible to release?

The minimum amount you can release is £10,000.

The more your property is worth, the higher the maximum amount that you can release will be. The maximum amount you will be eligible to release will also be affected by the age of the youngest homeowner. In general, the older you are, the higher the percentage of equity available to you.

Will my credit score affect my eligibility for equity release?

As there are no required repayments with a Lifetime Mortgage, there will not be any affordability checks involved in the process. This means that you could still be eligible to release equity if you have adverse credit. Your adviser will be able to talk you through your options if this applies to you.

Speak to a specialist.

Should you wish to find out more about releasing equity, Responsible Equity Release can help. Use our free online calculator to receive an instant estimate of the amount of tax-free cash you could be eligible to release.

Alternatively, you can give our friendly Information Team a call today on 0800 048 5384. They will be able to check whether you meet the eligibility criteria for releasing equity and, if you’re ready, arrange for you to have a free and no-obligation appointment with your local adviser so that you can determine if equity release is right for you without any pressure to proceed.

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