How much will equity release cost?
Max release by age, the roll-up debt and the equity left for your beneficiaries. UK lifetime mortgage calculator with 2026 rates and the no-negative-equity guarantee.
Last reviewed: 2026-05-20
Debt rolls up to £288,854 (49% of the house). House projected to £594,379 at 2.0% growth. The no-negative-equity guarantee means you'll never owe more than the house is worth.
Indicative figures using a typical industry LTV curve and annual compounding at the MER. No-negative-equity guarantee floors equity at £0. Educational only - regulated equity release advice is required before completion. Equity Release Council product standards apply.
Like the numbers? Get them checked by a regulated specialist.
Calculators give you the rough shape — an FCA-regulated later-life lending adviser can give you a real personalised quote and check the alternatives.
Debt vs house value over time
| Years from now | Debt | House value | Equity left | Debt % of home |
|---|---|---|---|---|
| 5 | £110,278 | £441,632 | £331,355 | 25% |
| 10 | £152,014 | £487,598 | £335,584 | 31% |
| 15 | £209,547 | £538,347 | £328,800 | 39% |
| 20 | £288,854 | £594,379 | £305,525 | 49% |
| 25 | £398,176 | £656,242 | £258,066 | 61% |
| 30 | £548,873 | £724,545 | £175,671 | 76% |
How a lifetime mortgage works
A lifetime mortgage is the most common type of equity release. You take a lump sum (or a drawdown facility) secured against your home. There are no monthly repayments - the interest rolls up and compounds at a rate that's fixed for life. The whole loan is repaid when both borrowers have died or moved into long-term care, usually from the sale of the house.
Two pieces of consumer protection make the modern product less risky than the unregulated 1990s versions: all Equity Release Council member plans include the no-negative-equity guarantee, so your estate can never owe more than the house sells for; and the FCA requires regulated advice before any plan can complete, meaning a qualified adviser must explore alternatives like downsizing and Retirement Interest Only (RIO) mortgages with you first.
The big number: how fast does the debt double?
At today's typical 6.6% MER, the debt doubles every ~11 years. So £80,000 released at age 70 becomes around £160,000 by 81 and £320,000 by 92. That's the headline trade-off: you get money now, your beneficiaries get less later. Whether the maths still leaves a meaningful inheritance depends on how long you live, what your home does in price terms, and whether you make any optional repayments (most plans now allow up to 10% per year without penalty).
Related
Common questions
- How much can I release from my home with equity release?
- The maximum is set by your age and home value. Typical max LTV curves run roughly 24% at age 55, 30% at 60, 36% at 65, 42% at 70, 48% at 75 and 53% at 80. So a 70-year-old with a £400,000 home can usually release up to about £168,000. Higher LTVs come at higher fixed rates, and some lenders cap LTV further on flats, ex-local-authority homes, or homes outside England and Wales. The Equity Release Council's product standards require you to take regulated advice before completing.
- What is the no-negative-equity guarantee?
- All Equity Release Council member products include the no-negative-equity guarantee. It means your estate will never owe more than the sale value of your home when the loan is settled (usually when both borrowers have died or moved into long-term care). If house prices fall or interest compounding pushes the debt above the sale price, the lender writes off the shortfall. The guarantee protects beneficiaries from inheriting a debt - the worst case is that there is no residual equity to pass on.
- What interest rate do equity release lenders charge in 2026?
- The lowest fixed-for-life MER (Monthly Equivalent Rate) on a standard lifetime mortgage at May 2026 is around 6.6%, with rates up to about 8.4% on higher-LTV plans. All ERC-standard plans are fixed for the life of the loan - so the rate locked in today applies until the loan ends, regardless of base-rate moves. This is very different from a normal mortgage. Always compare the MER (the true cost of compounding interest) - the headline AER can look lower but is not directly comparable across products.
- How fast does equity release debt grow?
- At a 6.63% fixed-for-life rate, the debt roughly doubles every 11 years. £80,000 released at 70 becomes around £160,000 by 81 and £320,000 by 92. Whether that swallows the equity depends on your house-price growth - at 2% real growth the debt overtakes the home value at around 20-25 years, but the no-negative-equity guarantee caps the downside at the sale price. Many plans now also allow optional repayments of up to 10% per year, which can dramatically slow or stop the compounding.
- How does equity release affect inheritance tax in 2026/27?
- The lifetime mortgage is a debt against the estate. When the house is sold and the loan repaid, the remaining equity is what passes on. So equity release can reduce a future IHT bill - the debt comes off the estate value before allowances are applied. But it also reduces what your beneficiaries actually receive. With the April 2027 pension change bringing DC pots into the IHT estate for the first time, the maths of "use the house or use the pension" is shifting; drawing pension first and leaving the house intact is often now the more tax-efficient route for couples with both.
- Are there alternatives to equity release I should consider first?
- Yes - and a regulated adviser is required to talk you through them. Common alternatives: downsizing (no debt, no interest, but emotional and transaction costs); a Retirement Interest Only (RIO) mortgage (you pay the monthly interest, capital stays the same - cheaper long-term if you can afford the monthly cost); using ISA or pension drawdown to delay needing the property wealth; family help (a deed of variation or a regulated family loan); local authority deferred payment for care fees; and downsizing combined with a smaller equity release if needed later. The right answer often depends on whether you actually want to leave the house intact.