Equity Release Calculator

If you’re considering an equity release scheme to access funds in or near retirement age, you’ve probably wondered how much you can borrow against the value of your home. Here, we guide you through how an equity release calculator works, what influences your equity amount, and what to look for when signing a deal.

How to use an equity release calculator

Below you’ll find our equity release calculator, which will enable you to get a rough idea of how much equity you can release from your property. Simply adjust the sliders to match your particular details and get an estimate.

Once you have a figure, you can better assess if an equity release scheme will provide you with enough funds to cover your costs, be it medical bills, buying a second property, or supplementing your retirement expenses. You can then use the figure to fill out a form to receive free, zero obligation quotes from multiple equity release brokers.

What influences how much equity you can release?

The total amount you can release will depend on what type of plan you choose, your age, and the value of your property. After using our equity release calculator, you’ll get a good idea of how much you can get. Typically, companies will allow you to borrow up to 50% of the value of your property.

As with any financial services, lenders need to ensure that their money is safe when they choose to enter into an equity release scheme with you. Therefore, some factors could influence whether your equity release application is approved, including:

• Type of property
• Location – such as whether it’s in an area of significant commercial development
• Condition of the property
• Sale potential
• Flood risk
• Type of ownership

Each lender will have its own specific restrictions, so ensure that you discuss these with the company. You should also note that most companies won’t approve your application if you still have a considerable amount left to pay on your traditional mortgage.

How to release equity from your home?

We compare plans from the leading equity release providers Compare quotes now

Once you’ve gotten a figure from our equity release calculator and submitted your details, you’ll get a range of quotes from various providers. It’s up to you to decide whether you want to proceed with any quotes. Before signing any contract, ensure that you discuss all your options and get advice from a professional equity release advisor.

What are the benefits of equity release?

Equity release offers people in or nearing retirement age the opportunity to access funds to cover various expenses. You shouldn’t have to worry about money when you retire, so equity release acts as a financial cushion to cover any unforeseen costs or supplement your retirement expenses.

You can also use the funds to help a loved one onto the property market, or perhaps go on a luxury holiday. Whatever the reason, equity release is a valuable tool when you do enough research and find a good deal.

How much does equity release cost?

As previously mentioned, the amount you can release will depend on various factors. The best way to get an exact quote is to fill out the free form to get rates from multiple lenders on the market. This is a great way to compare prices and services and find the deal that best suits you.

To give you an idea of the costs involved, we’ve provided an example quote below.

• A 60-year-old applicant with a property worth £250,000 could release £73,395 at an average rate of 3.60%. The more you borrow, the higher the rates.

Best equity release interest rates

A great way to find the best interest rates on the market is to use a price comparison site to get quotes from multiple brokers. You can also get better rates if you opt to borrow less. It might be tempting to release the total amount of equity, but this might result in unnecessarily high rates.

Work out how much your expenses will be and try to borrow an amount in line with that figure. Always remember that the more you borrow, the less you leave as an inheritance for your loved ones.

Where to get equity release advice?

It’s crucial that you seek advice from a professional financial advisor before making a decision. You should opt for one that specialises in equity release, as they will know what plan best suits your circumstances.

When choosing a company, you should ensure that they are full members of the Equity Release Council in the UK, which is the entity in charge of upholding and safeguarding standards in the industry.

What is the best equity release plan?

The best plan will depend on your circumstances and needs. Equity release comes with two options – lifetime mortgage and home reversion.

• Through a lifetime mortgage, you borrow funds against the value of your property. This is typically between 10% and 50% of the value, depending on your age.
• On the other hand, you can sell between 25% and 100% of your property through a home reversion plan but retain the right to live there until you either pass away or go into-full time care.

Note that there are various repayment options and ways to receive the funds with a lifetime mortgage.

Is equity release worth it?

Whether equity release is worth it or not will depend on your needs. Many people face unforeseen expenses when they reach retirement age and can no longer support themselves on their retirement income. An equity release plan will ensure that those people can continue to live to the same standards whilst not worrying about money.

Equity release is also great for covering other large payments, such as paying off debt and buying a second property. As with anything, there are situations where an equity release plan might not be the best option for you. A professional advisor will be able to identify other financial solutions that better suit your needs.