For many people, a home is their biggest asset. As you pay down your mortgage and property prices rise, your equity grows. Learning how to release equity from your home gives you more control over your money. It also provides flexibility when extra funds are needed.

The process is simple, but you must know how it works and what choices are available.

What is equity release?

Equity release lets you unlock part of your home’s value without selling it. You can take a lump sum, regular payments, or both. The money is tax-free and can cover many needs, such as home repairs, debt repayment, or family support. The amount you receive depends on your property’s equity and the type of product you choose.

What is home equity?

Home equity is the difference between your home’s market value and what you still owe.
For example, if your home is worth £300,000 and your mortgage is £150,000, your equity is £150,000. This is the part you own and can unlock through equity release.

Equity matters for long-term planning. It shows how much of your home is truly yours. You can read more in our equity guide.

What can impact my level of equity?

Your equity can rise or fall over time. Key factors include:

  • Property value: If house prices rise, your share of ownership increases.
  • Mortgage repayments: Each payment lowers your debt and raises your equity.
  • Additional borrowing: Taking extra loans against your home reduces equity.
  • Market changes: Falling prices shrink the amount you can access.

By watching these factors, you can see when releasing equity from your home is the right choice.

How does equity release work?

When you decide to access the equity in your property, a lender provides cash based on your home’s value and the amount you still owe on your mortgage. The two main types of equity release products are lifetime mortgages and home reversion plans.

  • Lifetime mortgage: You borrow against your home but continue to own it. Interest builds over time.
  • Home reversion plan: You sell part of your home to a provider, while continuing to live there.

The option you choose depends on your needs, age, and how much equity you want to unlock.

Can I remortgage to release equity?

One common way of accessing funds is by remortgaging. Instead of a specialist product, you replace your current mortgage with a new one, borrowing more than you owe and taking the difference as cash. This approach is often simpler for younger homeowners.

For example, if your mortgage balance is £100,000 and your home is worth £250,000, you might remortgage for £150,000. You pay off the old loan, and the extra £50,000 is released as usable cash.

If you’re exploring this route, our glossary on remortgage explains how the process works in everyday terms.

Do you pay back equity release?

Repayment depends on the product you choose. With a lifetime mortgage, the loan and interest are usually repaid when the property is sold. This often happens if you move into long-term care or pass away. Monthly repayments are not required unless you choose a plan that allows them.

With a home reversion plan, you sell part of your property to the provider. There is no direct repayment, but the provider takes its share of the property’s value when it is sold.

If you release funds through remortgaging, repayments begin straight away, just like a standard mortgage. You are borrowing more against your home, and the lender expects monthly payments.

What can I use equity release for?

Equity release lets you unlock cash from your home. The money is tax-free and can be used for many needs.

  • Home improvements: Pay for new kitchens, bathrooms, or energy upgrades. These changes make your home nicer and may add value.
  • Supporting family: Help children or grandchildren with school fees or give them a deposit for their first home.
  • Paying off debts: Use the funds to clear loans or credit cards. This makes monthly costs easier to manage.
  • Lifestyle needs: Cover travel, healthcare, or retirement plans. The money gives you more freedom to enjoy life.

Is there an alternative to home equity release?

Equity release is not the only option. Depending on your situation, you may want to look at these choices:

  • Remortgaging: Switch to a new mortgage and borrow more. This can sometimes give you money at a lower rate.
  • Homeowner loans (secured loans): Borrow against your equity while keeping your current mortgage. Your property acts as security for the loan.
  • Downsizing: Sell your home and buy a smaller one. This frees up cash without taking on more debt.
  • Savings and investments: Use savings or investments first. This avoids borrowing while still giving you extra money when you need it.

Frequently asked questions

How much equity can you release from your home?

It depends on your property’s value, how much you owe, and, if using a lifetime mortgage, your age. Lenders set a maximum percentage of your home’s value you can release.

When can you release equity from your home?

You can release equity when your property has enough value. It depends on your mortgage balance, property price, age, and lender rules. Some people remortgage at any time if they have equity. Others wait until later life for options like lifetime mortgages or home reversion plans.

Conclusion

The right time for releasing equity from your home depends on your mortgage balance, property value, and sometimes your age. Some borrowers can remortgage if they have enough equity and lender approval, while others may find lifetime mortgages or home reversion plans more suitable later in life.

Knowing how to release equity from your home is about more than getting cash. It’s about choosing the option that supports your long-term plans. Compare products and weigh alternatives to pick the path that fits your goals. If you’re unsure about your financial position, speak with a qualified broker who can offer you personalised advice tailored to your specific needs