Equity Release

In the UK, there are two main types of equity release: lifetime mortgages and home reversion plans. These are structured very differently and can have a significant impact on ownership, inheritance, and long-term outcomes.

With a lifetime mortgage, you borrow against your home while retaining full ownership, and the loan plus interest is usually repaid when you die or move into long-term care. With a home reversion plan, you sell part or all of your property to a provider in return for a lump sum or income, meaning you no longer own that share of your home. Lifetime mortgages are now far more common and flexible, which is why Flagstone advises exclusively on lifetime mortgages that meet modern consumer-protection standards.

The amount you can typically release depends on your age, health and your home’s value; many UK lifetime mortgage products allow you to access roughly 20%–60% of your property’s value. Older applicants and those with higher-valued homes generally qualify for larger sums, though specific limits vary by lender. Flagstone’s advisors run whole-of-market checks to estimate what you could reasonably unlock, so you avoid unrealistic expectations.

Equity release costs include the interest rolled up on your loan, advisor fees, legal fees, product fees and possibly a valuation fee, all of which can affect how much of your estate remains after repayment. Plans that follow Equity Release Council standards also build in guarantees like no-negative-equity but still accrue interest until repayment. Flagstone ensures you understand every cost component before you commit, helping you choose products that align with your goals.

Interest rates on equity release plans, especially lifetime mortgages, can fluctuate and vary by provider; because there are usually no monthly payments, interest is added to the loan balance over time. This means the total amount owing grows until the plan ends, which makes choosing the right rate important. Flagstone can compare current market rates and explain how they influence the total cost over time.

Equity release is regulated by the Financial Conduct Authority (FCA) and most plans that meet Equity Release Council standards include safeguards such as the no-negative-equity guarantee, which ensures you never owe more than the value of your home when it’s sold. However, it’s a long-term commitment and reduces what you can pass on to heirs, so it’s essential to consider it alongside your broader financial plans. Flagstone only recommends plans that fit your circumstances and helps you understand the risks as well as rewards.

Pros include accessing cash without moving home and using it to boost retirement income, fund home improvements, or clear debts; cons include interest accumulation, reduced inheritance and potential impacts on means-tested benefits. Unlike a traditional mortgage, repayments aren’t usually required during your lifetime, but the debt can grow substantially. Flagstone will help you weigh these pros and cons in a clear, personalised plan so you make a decision that suits your long-term goals.

Alternatives often include downsizing to a smaller property to free up capital, using savings or investments, considering a retirement interest-only mortgage with monthly payments, or borrowing from family. Each option has its own trade-offs in terms of cost, flexibility and security. Flagstone can outline these alternatives alongside equity release so you see the true relative cost and impact of each strategy.

Yes – selling your home is usually possible with a lifetime mortgage, but you’ll need to repay the loan and any interest first, either from the sale proceeds or other funds your estate provides. Your advisor and solicitor can help manage the timing and legal requirements so you understand any charges or conditions. Flagstone will guide you through this process to ensure you’re comfortable with the implications for sale or relocation.

When the last plan holder dies, the equity release plan ends and the outstanding loan plus accrued interest must be repaid, typically from the sale of the property or other estate assets; any remaining proceeds then pass to your beneficiaries. Most lenders allow a period (often up to 12 months) to organise repayment, and if the estate can cover it without selling the home, that’s also possible.

Generally, you must be at least 55 years old and own a UK home that meets minimum value and condition criteria; the exact requirements vary by lender and product type. Some plans may have additional conditions (for example, minimum property value or mortgage status). Flagstone assesses eligibility across multiple lenders to find plans that match your situation before you apply.

Lenders require a property valuation to confirm its condition and value, proof of age and ownership, and confirmation that you’ve received independent legal advice; plans following Equity Release Council standards also mandate solicitor certification of understanding. They don’t usually assess income or credit in the same way as traditional mortgages, but they will ensure the product is suitable given your circumstances. Flagstone coordinates these checks and clarifies what is expected at each stage to avoid surprises during the application process.