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Can I Release Equity if I am Under 55?

If you are familiar with the basics of equity release, you may already be aware that you must be at least 55 years old to be considered for a lifetime mortgage, and 65 years old for a home reversion.

This means you cannot get an equity release mortgage under 55 years of age.

This is bad news for younger people who would benefit from releasing funds from their home, and we know how disappointing it can be to be told you are not eligible.

However, there are other options available to you, and we would like to introduce you to these today.

If you are set on equity release, why not do as much research as you can while you wait to reach the minimum age for equity release?

There’s no harm in learning more about the advantages and disadvantages of equity release, and getting knowledgeable about how modern plans work.

After all, by the time you are entitled to an equity release loan, there may be new plans that provide you with benefits you never even considered.

Please call our 24-Hour Helpline: 0330 058 1579

Who is Eligible For an Equity Release Loan?

When you get into the details of eligibility, you will realise that it is different for each equity release provider and each equity release plan.

This means you should speak to an adviser for neutral advice on equity release before finding out if you are definitely eligible for equity release.

However, for now, we can state the three requirements that you must meet if you want access to an equity release loan.

First, you must be a homeowner. Second, your property must be worth £70,000 or more. Third, you must be at least 55 years old (or 65 for a home reversion).

Why Can’t I Get an Equity Release Mortgage Under 55 Years of Age?

There are several reasons people under the age of 55 are not suitable candidates for equity release.

The first is that there needs to be a cut-off somewhere, and given that the loan is intended to help people in their later years, it makes sense to have a minimum age requirement of 55.

Another reason you cannot release equity before you turn 55 is that with equity release loans, the debt is rolled up and paid off through the sale of your home when you pass away.

If you take out a personal loan early, you will end up owing a ridiculous amount as the interest accrues over the years.

As many equity release lenders have a no negative equity guarantee in place, meaning you will never owe back more than the initial loan amount, providers would lose out if people who took out equity at a young age were owing a huge amount of interest and never paying it back.

Please call our 24-Hour Helpline: 0330 058 1579

What Happens If I am Under 55 Years Old But My Partner is Not?

The requirement for most equity release schemes is that the youngest applicant must be at least 55 years old.

This means if you are submitting a joint application for an equity release mortgage under 55 years old, the age of your partner unfortunately cannot counteract the fact that you are too young.

The same can be said the other way around – if your partner is too young, you cannot take out equity with a joint lifetime mortgage. However, it is possible to make an individual application that your partner is not involved with.

Please call our 24-Hour Helpline: 0330 058 1579

Is There an Upper Age Limit for Equity Release?

No, there is no upper age limit for equity release in general. Some plans may enforce a maximum age, for example 85, but others are much more accessible in terms of age.

How Does Age Affect Equity Release Loans?

Sometimes, older people benefit more from equity release as they are entitled to higher loans, lower interest rates and other additional benefits.

This is particularly true if they struggle with their health – see enhanced lifetime mortgages (also known as ill-health schemes).

What are the Alternatives to Equity Release For People Under 55 Years Old?

Don’t worry if you need extra money and you are not yet eligible for equity release, as there are many other paths you could go down, and we are happy to explain the wide range of financial solutions in detail over the phone.

1. Downsizing

One option is to downsize. This evidently involves a lot of effort, as you will have to go through the process of selling your current home and finding another property you would like to live in, which often comes with unexpected challenges such as delays.

On the bright side, downsizing will leave you with more money for the essentials, such as paying bills.

Some of our clients decide to downsize in order to make equity release possible.

You could downsize at this age, enjoy your new property for a few years, and then take out an equity release loan later down the line when you are 55 years old or above.

2. Start Saving

This tip is obvious, and we know that it isn’t easy for everyone to save when so much of your money needs to go towards essential expenses.

However, there are ways you can improve your saving, and ultimately leave yourself with a larger retirement income, meaning you may not even need to take out a loan.

3. Rent Out a Room in Your Home

Some people decide to rent out a room in their house as a way of generating more income. This is also a great idea if you are a social person who would benefit from more company.

However, not everyone is ready to take this step, as many of us enjoy the privacy that comes with living alone or with just a partner.

What’s more, your house is not necessarily in a high-demand area, so you may struggle to find potential candidates, particularly if you are in a rural area.

Again, you may use this method as a means to an end, and then decide to ultimately release equity when you meet the eligibility criteria.

Please call our 24-Hour Helpline: 0330 058 1579

What Can Equity Release Be Used For?

The great thing about equity release is that it can be used for absolutely anything you would like. Of course, we wouldn’t recommend spending your equity release funds on something that will not benefit you in the long-run, such as impulse purchases.

However, at the end of the day, the money is your own, and the only thing holding you back is ensuring you have enough money left over to pass onto your loved ones (if this is something you would like to do).

If you are looking for ideas on what you could spend your money on, an obvious idea is bills, such as household bills and medical bills.

As living costs are rising, more and more people are struggling to pay their bills and they fear they are at risk of not being able to make ends meet.

If you put your loan towards these expenses, you would feel liberated from the fear of not being able to survive financially.

Another idea is to gift the money to your family. This would be incredibly generous, and is of course not a requirement, but some people choose to do this as they have younger family members who are struggling to pay for a deposit on a house or to pay their rent each month. Others decide to spend their loan on school fees for their grandchildren, or weddings for other family members (2).

You could use the loan to buy a big family holiday and enjoy time with your loved ones after spending so many years working. Some people love this idea as they may get to spend time with people they live far away from, or people who they usually don’t get to see on a regular basis.

Finally, why not renovate your home? You will most likely be spending more time in your home when you retire, so we can’t think of anything better to spend your money on.

Perhaps you would like to have an extension (though this would have to be approved by the equity release lender), renovate your rooms, or install disabled-friendly furniture. Any of these options would vastly improve your standard of living.

Please call our 24-Hour Helpline: 0330 058 1579

Frequently Asked Questions About Equity Release

We hope you now understand why there is a minimum age requirement for equity release, and what you can do if you don’t yet meet that requirement.

However, there are other frequently asked questions we receive about releasing equity, and we want to clear some of them up for you before you contact us.

1. Is Equity Release Safe?

Yes, if you approach equity release with a sensible mindset and you find a professional adviser, equity release is a safe process. However, if you submit an application without looking into it and without recruiting the help of an adviser, you are putting your money at risk.

2. Do I Have to Have a Good Credit Rating to Take Out Equity?

For the most part, your credit rating does not come into it, which is great news for anyone with a poor credit score. As long as you meet the main eligibility requirements, you don’t have to worry about your financial history.

However, you may be prohibited from getting involved with certain equity release plans if you have a bad credit history. If this happens, you can always find another plan that does not value credit status.

3. What Happens If I Have an Existing Mortgage?

Many equity release consumers have outstanding mortgages, and this does not mean they cannot take out equity. All it means is that they have to transfer their conventional mortgage to an equity release one, and use the equity loan to pay off the first mortgage.

4. Can I Move Home With an Equity Release Loan?

If you are considering moving home in the future, you may worry that this won’t be possible after releasing equity. This may be true, as some lenders want you to remain in the same property as a homeowner until you pass away or move into long term care.

However, if your adviser is affiliated with the Equity Release Council (ERC), you will always be able to move house as the lender is required to provide you with a suitable alternative property at your request.

This does mean you are limited in your selection of a new property, however.

5. Can I Receive My Loan as a Lump Sum?

Yes, you certainly can. If you opt for home reversion schemes, you will automatically receive a tax-free lump sum of cash.

With a lifetime mortgage, go for a scheme that offers lump sums, such as the lump sum lifetime mortgage.

You could also have a combination of an initial lump sum payment and then regular payments with a buy-to-let scheme (intended for people who want to purchase a property to rent out) or a drawdown lifetime mortgage.

6. What Happens If the Lender Takes Advantage of Me?

It is not unheard of that a lender will take advantage of a client and leave them in an unstable financial position. This is precisely why we encourage you to do your research when it comes to choosing a lender, and to ensure they are affiliated with reputable institutions.

You can look at our home page to find lifetime mortgage lenders we recommend, and selecting one of these lenders will give you financial security as they are proven to be reliable.

You should also ensure the provider is regulated by the Financial Conduct Authority (FCA) as the FCA will get involved if you have any issues with your money during the equity release process.

Please call our 24-Hour Helpline: 0330 058 1579

Contact Equity Release Warehouse About Alternatives

For more information and advice about equity release, we are available for a phone call between 8am-8pm every day of the week.

Our equity release advisers are incredibly warm and friendly, and they would be delighted to answer any of your queries, no matter how obvious they may seem.

If you know that you are too young for equity release and therefore it is not yet a viable option for you, we can discuss your plans for the future and encourage you to consider how you could prepare for equity release right now.

We can also discuss alternative options in more detail, as we don’t want to deprive our clients of learning about the many different ways of boosting their income in their later years.

For an idea of how much money you could release when you turn 55, use our equity release calculator. All you need to do is select your age (select 55 as this is prospective), the value of your property, and the type of property you own.

Remember that your property may rise in value over the next few years, so the estimate that is calculated may actually be lower than the amount you are able to release when you are 55 years old.



[2] Will using equity release affect my children’s inheritance?



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Types of Equity Release Plans

There are two kinds of equity release plan, and these are lifetime mortgages and home reversion.

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Equity Release Calculator

Use the equity release calculator below to discover how much money you could release from your home.

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