Do I qualify for equity release?


There are a variety of considerations to think about before taking out an equity release plan.


The primary criteria for equity release is that you are aged 55 or older and own a property in the UK with little to no mortgage.


If you are looking to apply for a lifetime mortgage or a home reversal scheme, however, there are several qualifying rules imposed by lenders that you must first meet.


Is your property situated in the UK?


To qualify for an equity release scheme your property must be situated in the UK.


It’s also worth noting that localised rulings will apply to some areas of the UK, such as Northern Ireland.


Currently, there are only two providers available in Northern Ireland, while other lenders insist that a property must be based within the UK mainland. For instance, The Isle of Man is always excluded from equity release schemes.


Freedom Advice will always highlight a situation where the location of your property will be an issue to equity release lenders.


Does your property meet the required criteria?


In our experience, no lender will accept a property below £70,000, while on the other hand, there is theoretically no upper valuation limit. Certain lenders do impose a cap to protect themselves from risk.


Lenders will always take the condition of your property into account and will expect a property to be in good condition and well maintained.


A lender will decline a property that needs essential repairs or if there is a substantial amount of clutter within the home.


How old are you as the homeowner?


The minimum age that someone can apply for equity release is 55, although some lenders will require homeowners to be older.


It’s worth remembering that the younger that the homeowner is, the less that they will be able to borrow.


As always, the minimum age of a homeowner will differ according to specific plans. At Freedom Advice, we can provide you with the most appropriate plans for your personal circumstance.


How much money do you wish to borrow?


For many lenders, the minimum that they will offer a homeowner is £10,000, although some lenders will set their baseline at £15,000. In some cases, depending on the scheme, this could also be as high as £100,000.


In regards to the maximum amount that a person is allowed to borrow, this can depend on a multitude of factors, including:


  • The age of the youngest person in the property.
  • The health and lifestyle of that person.
  • The value of the property in question.
  • The older that an applicant is, the higher the loan amount can be taken.


Freedom Advice will help guide you through the appropriate loan amounts for your situation; allowing you to get the best possible deal for your individual needs.


What is your credit history?


Generally, the lending criteria for equity release loans are more relaxed, as no repayments are required by lenders.


If a person has poor credit, however, lenders can still decline an application, although this will depend on the severity of the situation.


That said, however, there are even lenders that choose not to undertake a credit check.


If you are a homeowner that does not have a great credit history, Freedom Advice can locate schemes and lenders that could be sympathetic to your lending needs.



Frequently Asked Questions