Equity release lets homeowners aged 55 and over unlock cash from their property without selling or moving. The most common type is a lifetime mortgage — a loan secured on your home that rolls up interest until you die or move into long-term care, at which point your home is sold to repay the debt.
The amount you can access, the rate you pay, and the features of the plan vary significantly between providers. This guide compares the major UK equity release providers for 2026.
How Equity Release Works
With a lifetime mortgage (the most popular type):
- You borrow a lump sum or draw down cash as needed
- Interest rolls up on the outstanding balance — you make no monthly payments unless you choose to
- When you die or move into long-term care, the property is sold and the loan (plus rolled-up interest) is repaid
- Any surplus goes to your estate
With a home reversion plan (less common):
- You sell a percentage of your home to a provider in exchange for a lump sum or income
- You retain the right to live in the property rent-free for life
- Your estate receives only its retained percentage of the final sale price
All Equity Release Council members must offer a no-negative-equity guarantee — you will never owe more than your home is worth.
Provider Comparison — Major UK Equity Release Lenders
| Provider | Type | Equity Release Council member | Notable features |
|---|---|---|---|
| Aviva | Lifetime mortgage | Yes | Market leader; wide age range (55–90); drawdown and lump sum; voluntary repayments allowed |
| Legal & General | Lifetime mortgage | Yes | Competitive rates; flexible drawdown; inheritance protection option; downsizing protection |
| Pure Retirement | Lifetime mortgage | Yes | Specialist-only (adviser access required); competitive rates on smaller loan sizes |
| Canada Life | Lifetime mortgage | Yes | Strong for properties in less common ownership structures; flexible repayment options |
| Just (Just Group) | Lifetime mortgage | Yes | Good for older borrowers; enhanced terms for health conditions |
| Standard Life | Lifetime mortgage | Yes | Competitive rates; part of Phoenix Group; good for higher-value properties |
| LV= | Lifetime mortgage | Yes | Flexible drawdown; inheritance protection; competitive on interest rates |
| Hodge | Lifetime mortgage | Yes | Specialist lender; good for complex cases; interest-only option for those who can afford payments |
Key Features to Compare
1. Interest Rate
Even a 0.5% difference in rate has a major effect over time because interest compounds.
Illustrative example — £50,000 released at age 65:
| Rate | Balance after 10 years | Balance after 20 years |
|---|---|---|
| 5.5% | £85,300 | £145,500 |
| 6.0% | £89,500 | £160,000 |
| 6.5% | £93,900 | £175,500 |
| 7.0% | £98,400 | £193,500 |
Assumes no repayments. For illustration only.
2. Drawdown vs Lump Sum
A drawdown plan lets you release a smaller amount initially and draw additional funds as needed. Interest only accrues on what you have drawn — so total interest costs can be significantly lower than taking a lump sum.
| Lump sum | Drawdown | |
|---|---|---|
| Upfront amount | All at once | Smaller initial, flexible top-ups |
| Interest accrual | On full amount from day one | Only on drawn amounts |
| Best for | Known large expense (care costs, gifting) | Topping up income over time |
| Reserve facility | No | Yes — pre-agreed amount available on demand |
3. Voluntary Repayment Options
Most plans allow repayments of 10–12% of the original loan per year without an early repayment charge. Making regular voluntary payments significantly reduces the final debt. On £50,000 at 6%, paying £3,000/year (6%) could reduce the 20-year balance from £160,000 to under £100,000.
4. Inheritance Protection
Some providers offer an inheritance protection guarantee — ring-fencing a set percentage of your property value for your estate. This reduces the maximum you can release but gives beneficiaries certainty of receiving something.
5. Downsizing Protection
Equity Release Council standards require providers to allow plan transfer if you downsize to a suitable property. Some providers also offer a no-penalty exit clause after a set period if you move to a property that does not qualify.
How Much Can You Release?
The maximum loan-to-value (LTV) depends on age:
| Age | Approximate max LTV |
|---|---|
| 55 | 20–25% |
| 60 | 25–30% |
| 65 | 30–38% |
| 70 | 35–45% |
| 75 | 40–50% |
| 80+ | 45–55% |
LTV increases with age. Joint plans use the youngest applicant’s age. Figures vary by provider.
Worked example: A 68-year-old with a £350,000 property could typically release between £105,000 and £140,000 (30–40% LTV), depending on the provider and product chosen.
The Cost of Equity Release — Total Picture
Beyond the interest rate, budget for:
| Cost | Typical amount |
|---|---|
| Adviser fee | £1,500–£2,500 |
| Valuation fee | £150–£750 (sometimes free) |
| Solicitor fees | £800–£1,500 |
| Application/completion fee | £0–£995 |
| Total upfront costs | £2,500–£5,500 |
Is Equity Release Right for You?
Equity release is not the only option. Before proceeding, consider:
- Downsizing — selling and moving to a smaller property releases equity without debt
- State benefits check — ensure you are claiming everything you are entitled to (Pension Credit, Council Tax Reduction)
- Personal loan or remortgage — if you can service monthly payments, a conventional mortgage may be cheaper
- Family gifting alternatives — a family member lending money informally may suit some situations
Equity release is most suitable when: you want to stay in your home, you have no dependants relying on the inheritance, and you understand that the compounding interest will reduce what your estate receives.
Always use an FCA-authorised equity release adviser before proceeding. You are legally required to take independent legal advice as part of the process.
For more on funding retirement, see how much pension at 55, average net worth by age UK, and the state pension guide.