Equity release

Equity release is a later-life housing finance product in the United Kingdom that allows homeowners to access money tied up in their home equity while continuing to live in the property. The most common forms are lifetime mortgages and home reversion plans. The loan and interest are repaid from the sale of the home after the borrower dies or moves into long-term care. In the United States, comparable products are described as reverse mortgage loans.

Equity release is marketed to older homeowners and can reduce the value of any inheritance and affect eligibility for means-tested benefits. In a lifetime mortgage, interest may be added to the loan balance over time, so the debt can grow substantially if no repayments are made. The Equity Release Council's standards include a no negative equity guarantee, meaning that the borrower or estate will not owe more than the property is worth when it is sold. Equity release products are regulated by the Financial Conduct Authority, and consumer guidance recommends seeking specialist authorised advice before entering a plan.