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.
This calculator helps you understand your financial position using current UK rates and regulations for the 2025/26 tax year. Whether you are planning savings, evaluating loan options, or projecting investment growth, accurate calculations are essential for making informed decisions about your money.
UK financial products are regulated by the Financial Conduct Authority (FCA). Interest rates, fees, and terms vary significantly between providers, so comparing actual costs rather than headline rates is important. This tool gives you a clear picture to inform your comparisons.
The Bank of England base rate is 4.5% as of early 2026. The Personal Savings Allowance lets basic rate taxpayers earn up to £1,000 in savings interest tax-free (£500 for higher rate taxpayers). The annual ISA allowance remains at £20,000, and the Lifetime ISA allowance is £4,000 with a 25% government bonus for first-time buyers or retirement savings.
Saving £200 per month into an account earning 4.5% AER would grow to approximately £2,454 after one year, including £54 in interest. Over 5 years at the same rate, your £12,000 in contributions would grow to roughly £13,362, earning £1,362 in compound interest.
Source: Based on current UK financial rates. Last updated March 2026.
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.
Data verified against official UK government sources. Last checked April 2026.