Equity release allows homeowners aged 55 and over to unlock tax-free cash from their property without selling or moving. But how much can you actually borrow? The amount available depends on several factors, including your age, property value, and even your health and lifestyle choices. In this article, we’ll break down the key factors that determine how much you can release and explore ways you may be eligible to borrow more.
How is Your Equity Release Amount Calculated?
The maximum amount you can borrow through equity release is typically a percentage of your home’s value. Lenders determine this based on:
- Your Age: The older you are, the higher the percentage of your home’s value you can access.
- Property Value: The more your home is worth, the larger the potential loan amount.
- Equity Release Plan Type: A lifetime mortgage, the most common form of equity release, allows homeowners to borrow while retaining full ownership of their property.
Most lenders offer between 20% and 55% of your property’s value, but several personal factors can impact your eligibility.
How Your Age Affects Your Borrowing Limit
Age plays a crucial role in determining how much equity you can release. Generally, the older you are, the more you can borrow because lenders expect the loan to be repaid sooner.
- At 55: You may be able to release around 20% to 25% of your home’s value.
- At 70: You could access 35% to 45% of your property’s value.
- At 80+: Borrowing could increase to 50% or more of your home’s value.
This is why equity release often becomes more appealing later in life when homeowners need access to additional funds without taking on monthly repayments.
Health and Lifestyle Factors That Can Increase Your Borrowing
Lenders assess various factors beyond just age and property value. If you have certain health conditions or lifestyle habits, you may qualify for a higher loan amount than detailed above under an enhanced equity release plan.
1. Impaired Life and Health Conditions
If you have a serious medical condition, lenders may offer a higher loan-to-value (LTV) ratio, allowing you to borrow more. Some qualifying conditions include:
- Heart disease or stroke history
- Cancer diagnosis
- Diabetes requiring insulin
- High blood pressure
- Parkinson’s disease
- Multiple sclerosis
2. Smoking and Lifestyle Factors
If you smoke, you may be eligible for higher borrowing amounts. Since smokers have a shorter average life expectancy, lenders may allow a greater percentage of home value to be released.
Other lifestyle factors that could influence borrowing include:
- Obesity (as defined by BMI over 40)
- Occupational hazards (e.g., past work in hazardous environments like mining or chemical industries)
These factors make enhanced lifetime mortgages an option for those who may not qualify for the highest standard borrowing limits.
Can You Borrow More in the Future?
If you don’t need a lump sum upfront, most equity release plans allow you to withdraw funds in stages through a drawdown facility. This means:
- You only borrow what you need, reducing interest accumulation.
- If your circumstances change, you may access more funds later.
If your health declines or your home increases in value, you may also be eligible for a further advance, allowing you to borrow more later.
FAQs About Borrowing with Equity Release
Can I Increase My Equity Release Loan Later?
Yes. Many plans allow further borrowing, either through a drawdown facility or a further advance.
What Happens If My House Value Goes Up?
If your home increases in value, you may qualify for a higher loan amount in the future.
Will I Still Own My Home?
Yes. With a lifetime mortgage, you retain full ownership, and the loan is only repaid when the property is sold after you pass away or move into long-term care.
How Much Can I Borrow?
The amount depends on your age, property value, and personal circumstances. Use our Equity Release Calculator to estimate how much you could unlock.
Next Steps
Understanding how much you can borrow is key to making the right financial decision. To explore your options:
- Speak to a specialist on our Equity Release Adviser page.
- Read our related guides:
By understanding your borrowing potential, you can make an informed decision about how equity release fits into your financial future.
