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Upper and Lower Age Limits for Equity Release Mortgages

Do you know the minimum and maximum ages equity release lenders will accept? This guide covers all the essential information you need before you apply.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2024-07-17
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Upper and Lower Age Limits for Equity Release Mortgages

Most equity release mortgage lenders have strict rules about maximum and minimum applicant ages, with 55 as the standard age at which you can apply.

Revolution Brokers receives many queries about eligibility for equity release, the alternatives, and how to pick the right product - so we've summarised here all you need to know!

Age Limits on Equity Release Explained

As we've mentioned, most equity release products are available to homeowners aged 55 or above, although you can sometimes apply as a joint applicant with one younger party.

Normally, that involves transferring the equity share owned by the second applicant to the first, so it isn't always a suitable option.

In some cases, joint applicants can apply for an equity release mortgage if one is under 55 and agree to sign an occupancy waiver.

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Maximum Ages on Equity Release Mortgages

You may also find that your selected lender has a maximum age applied at the time of the application.

It varies between lenders, but most will accept applications from people up to age 85, although some will consider older applicants.

Equity release products are intended as a long-term borrowing solution. The home is sold when the applicant passes away or enters into long-term care, so there isn't usually any maximum age at the end of the mortgage term.

As a quick indication:

  • Equity release mortgages are not available to any applicant under 55 (with some exceptions for joint applicants).
  • Between 55 and 65, you'll normally be able to apply without any lender restrictions.
  • From 65 to your 70s, some lenders will apply restrictions, but it's less likely.
  • Applicants over 80 may find that some lenders impose a maximum age at the point of application, although that isn't a universal requirement.

How Does the Cost of Equity Release Change With the Applicant Age?

Equity release lenders will evaluate a range of circumstances before making an offer:

  • Your age
  • Health conditions
  • Property type
  • Property value
  • Amount of equity owned

Usually, you can borrow a higher proportion of your equity the older you are.

Lenders don't need to evaluate affordability (because you normally won't make any repayments). Instead, they'll ask for a medical assessment to decide what Loan to Value (LTV) they are prepared to lend.

For example, if an applicant is 63 and wishes to take out an equity release loan, they will be offered more against the same property than if they were 57.

Equity release mortgages tend to be the most attractive borrowing solution for people in their 80s or above. The assessment process works quite similarly to the calculations for retirement annuity rates.

Maximum LTVs also vary between lenders - you can usually borrow up to 50% of your property value, although some lenders will offer 55% or even 60%.

Which Products for Equity Release Under 55 or Over 55 Are Available?

There are two primary types of equity release mortgages: home reversion plans and lifetime mortgages.

Home reversion plans have been around for longer and tend to be less popular than lifetime mortgages because of the difference in how the loan affects your property ownership.

  • A home reversion plan means you sell some or your entire home to the lender, and they pay you either in a lump sum or in regular instalments. Most home reversion plans carry a higher minimum age, and most successful applicants are 60 - 65.
  • Lifetime mortgages mean that you take out a loan secured against your property but don't need to pay anything back - unless you wish to. The interest is usually accrued and added to the loan balance, and the property is sold when you go into care or pass away.

Lifetime mortgages permit you (and a partner) the right to live in your home for your lifetime and carry negative equity guarantees that mean your beneficiaries will never inherit a debt.

We tend to advise against home reversion plans because they don't usually offer anything close to market value, but the right solution depends on your requirements.

Can I Use Equity Release Under 55 in Any Scenario?

No - an equity release mortgage is designed specifically for people of 55 or above, so you wouldn't be able to apply for a lifetime mortgage at a younger age.

However, several different mortgages or loans effectively release equity and may be a more beneficial solution.

Most applicants who are too young for a lifetime mortgage are better off with a remortgage or a secured loan - we'll run through some of the options below!

How Can I Release Equity in House Under 55 if I Am Ineligible for an Equity Release Mortgage?

If you want to release equity from your home and are under 55, you may qualify for any of the below products - eligibility and affordability criteria dependent.

Secured Loans

Secured loans, or second charge mortgages, mean you take out a loan secured against your home, in addition to your existing mortgage.

Most secured loan providers will consider UK applicants who own a property with a reliable income and sufficient equity to cover the borrowed amount.

You're more likely to find a secured loan at a younger age and will normally be offered a lower interest rate than an older applicant.

Remortgages

Remortgaging is an option if you want to borrow more than your current mortgage balance and aren't locked in to a fixed-term contract.

You'll need to have enough equity and have your property valued before you can complete a remortgage application.

Personal Loans

A personal loan is usually suitable if you wish to borrow a smaller amount over a shorter period.

The interest rates are higher than secured loans, so they're not often the best solution if you want to make smaller repayments over a longer-term.

Alternatives to Equity Release Explained at Over 55

If you are over 55 and aren't keen on an equity release mortgage, you still have a few alternatives you might wish to consider.

Downsizing is one solution, where you sell your current home and buy something smaller, keeping the difference in value.

For example, if you sell a property worth £400,000 and buy another for £250,000, you have released £150,000 of equity without paying interest costs or equity release fees (although legal expenses will apply).

Homeowners that don't wish to move or downsize could also look at retirement interest-only mortgages.

These lending products are designed for retirees, and you can repay the interest each month without needing to pay back the capital borrowed.

The process works like a lifetime mortgage where the lender sells the property when you enter care or pass away, repaying the debt and giving the balance to your estate.

Although retirement interest-only mortgages usually have higher borrowing limits, you do need to run through affordability checks so the lender can verify that you can afford the interest.

How Can Equity Release Advisers Help Me Choose the Best Equity Release Mortgage?

Most equity release applicants are looking to finance retirement, top-up their pension, or cash in on their investment in their home.

Choosing the right product is essential, particularly if you rely on your property to provide the capital you need for a comfortable lifestyle.

As a whole-of-market, independent mortgage brokerage, Revolution Brokers can provide insights to ensure you understand the pros and cons of each equity release solution and make confident decisions about your future finances.

Please get in touch at your convenience to speak to one of our equity release advisers - you'll find all the available options on our Contact page.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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