This section explains the method behind this calculator so you can trust and verify your result. For planning decisions, run at least two scenarios: your current case and a conservative case with higher costs or lower income.
The calculator applies the selected inputs in sequence, validates boundaries, and then computes outputs using the current UK rules shown on the page. If an input is missing or outside expected ranges, the tool should prompt for correction before final calculation.
Use this output as a decision-support estimate, then confirm with official sources or professional advice where required. For tax and payroll topics, cross-check against HMRC guidance and your latest period figures.
Equity release allows homeowners aged 55+ to access the value tied up in their property while continuing to live in it. The two main types are lifetime mortgages and home reversion plans. As of 2025, UK homeowners hold over £5 trillion in property wealth — equity release is one way to access this for retirement income, home improvements, or to support family members.
A remortgage replaces your existing mortgage with a new deal, often to access a lower interest rate or release equity while still making monthly repayments. Equity release (such as a lifetime mortgage) doesn't require monthly repayments — interest rolls up and is repaid when you die or move into care. Equity release is typically available to those aged 55+, while remortgaging is available at any age subject to affordability. Remortgaging generally costs less over time if you can afford repayments.
The maximum amount you can release depends on your age and property value. Lenders typically allow 20-60% of the property value, increasing with age. A 60-year-old might access 25-30% of their home's value, while an 80-year-old could access up to 50-60%. The average UK equity release was £94,000 in 2024. Providers authorised by the Equity Release Council guarantee a "no negative equity" promise, meaning you'll never owe more than your home is worth.
Lifetime mortgage interest rates are typically 5.5–8.5% (2025 rates). Because interest compounds over time, a £100,000 release at 6% would grow to £320,000 after 20 years if no repayments are made. This is why equity release significantly reduces the inheritance left to beneficiaries. Some lifetime mortgages allow optional interest payments to prevent compound rollup. Always compare rates using the Equity Release Council's registered providers and obtain independent financial advice.
Yes — equity release proceeds may affect your entitlement to means-tested benefits such as Pension Credit, Council Tax Reduction, and Universal Credit if the lump sum increases your savings above the capital limits (£6,000 for full benefits, £16,000 for partial). However, if the money is spent on home improvements or gifted within seven years, these effects can be managed. Always check with a benefits adviser before releasing equity. A pension credit calculator can help assess your current entitlement.