Equity release is a way to unlock tax-free cash from your home once you reach age 55. While there are other options available, many people choose to release equity from their home as part of planning for retirement. Or to fund the lifestyle they want once they start working less, or stop working all together.

Types of Equity Release

There are a few different types of Equity Release plans out there:

Lifetime Mortgage

This is the most popular option, where you get a tax-free lump sum loan from your home. You continue to own your home, but interest is applied on the loan and will need to be repaid after your death or on entering long term care.

Drawdown Lifetime Mortgage

Just like the Lifetime Mortgage, you continue to own your home after you release money from it. Again interest will be applied and will need to be repaid. However, here you have a little more flexibility. You can release money over time as and when you need it, instead of in one big lump sum.

Interest Only Lifetime Mortgage

This type of plan is just like a normal Lifetime Mortgage, where you get a tax-free lump sum and continue to own your home. However, with an Interest Only Lifetime Mortgage you have the freedom to make repayments to the plan. This will help lower the effect of the interest on the value of your property.

Home Reversion Plan

This type of plan is different from a Lifetime Mortgage as you give up the ownership of some of your property for a tax-free lump sum. You also have to be age 65 or over to take out this kind of plan. You still get to stay in your property, and you don’t have to pay any rent to the lender.

Pros and cons of Equity Release


  • You get a lump sum of tax free cash
  • Once you’ve paid off your standard mortgage with your lump sum, you can spend the leftover cash on whatever you want
  • You can keep living in your home after releasing money from it
  • You don’t have to make any monthly payments on any Lifetime Mortgage plan, it gets repaid when you die or if you move into long-term care
  • With any Lifetime Mortgage plan you still own 100% of your home


  • Any cash you release from your home could affect any means-tested benefits you’re entitled to
  • When you die or go into long term care, the money you released from your home is paid back from your estate, along with any interest. This means the money you leave to your loved ones would go down
  • If you go for a Home Reversion Plan and then sell part or all of your home, you will not benefit from any increase in the value of your home
  • An Equity Release plan is a lifetime commitment - if you want to pay the loan back early or buy back your home you will need to pay additional charges

See how much money you could unlock from your home

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Related pages

How does Equity Release work?

Find out how much tax-free cash you could access and understand the costs.

Find out how Equity Release works >

What is a Lifetime Mortgage?

A Lifetime Mortgage is a type of Equity Release plan where you unlock money but continue to own your home.

Find out how a Lifetime Mortgage works >

What are the different types of Equity Release?

A Home Reversion Plan lets you unlock money by selling some or all of your property.

Find out how a Home Reversion Plan works >

Standard Life Client Management Limited is registered in Scotland (SC193444) at 1 George Street, Edinburgh, EH2 2LL. Standard Life Client Management is authorised and regulated by the FCA. Its FCA register number is 435970. Age Partnership Limited (registered in England (5265969) at 2200 Century Way, Thorpe Park, Leeds, LS15 8ZB). Age Partnership is authorised and regulated by the Financial Conduct Authority. Their FCA register number is 425432