Paying your mortgage into retirement can place an extra financial burden on an already reduced household income. Mark Gregory looks at whether equity release could be a solution…
The Question
I wondered if you could help me find out if I’ll be eligible for equity release, please? I am a 65-year-old widow, and I am still paying the mortgage on the family house. I have around £21,000 to pay off. I have a part-time job and savings. Still, I do worry about what might happen if I lost my job and I’m not getting any younger, so equity release is a practical option for me.
The house is likely to be valued at around £320,000 and I have no dependents. Could I take out equity release to pay off the mortgage and provide me with some money to support the pension? If so, how much could I release?
Mark’s Answer
Thank you for your question — and I’m sorry to hear you’re feeling uncertain about your situation. The good news is that equity release could be a realistic and supportive option, and you’re far from alone. We speak to many people in similar circumstances, managing a mortgage later in life, often with limited income and increasing concerns about financial security.
From what you’ve shared – age 65, a home valued around £320,000, and a remaining mortgage balance of £21,000 – you would likely meet the eligibility criteria for a lifetime mortgage, the most popular form of equity release.
Could you qualify?
The basic criteria for a lifetime mortgage are:
- Minimum age: 55
- Minimum property value: £70,000
- Property in the UK (subject to lender checks)
Based on your age and property value, you could release up to £136,000, depending on your health and lender criteria. This could comfortably replace your existing mortgage and give you the option to release further funds now, or keep them back in a drawdown facility to access later, should you need them.
How does it work?
If you proceed, your current mortgage would be repaid from the equity you release. Your solicitor would handle this as part of the application. After that, the lifetime mortgage replaces your old one – and you can choose how to manage it:
- Make no payments at all (interest rolls up)
- Make voluntary payments when you wish – up to 10% per annum with no penalties, or proof of income requirement
- Or commit to regular monthly payments to control the balance
The key benefit? The interest rate is typically fixed for life, so you always know where you stand. And if you choose not to make repayments, your adviser will show you clear illustrations of how the balance would grow over time.
What about fees?
There are advice fees and legal fees involved, but these are only usually paid upon completion – and can be added to the loan if needed. Please be aware that if fees are added to the loan, it will cost more over the long term due to the interest charged on this amount also. Our advice is always personalised, FCA-regulated, meets Equity Release Council Standards and with no charge until your case completes.
What’s next?
I’d recommend speaking with one of our friendly, specialist advisers. They’ll assess your full situation and provide you with a bespoke recommendation, with no obligation whatsoever.
You can get started by calling 0800 802 1051 or by finding a local adviser near you via our Find an Adviser tool.
Or if you’re just curious to see how much you could release, try our smartER comparison tool – it’s free, quick, and tailored to your circumstances.
Meet our expert…
Mark Gregory, founder and CEO of Equity Release Supermarket, is here to answer your questions. Mark is an adviser himself with over 20 years equity release experience.
He launched Equity Release Supermarket 10 years ago and it has grown to become one of the UK’s leading equity release specialists.
Email kate.saines@emap.com to ask Mark a question
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