Without knowledge of the equity release criteria in 2025, you may miss out on the chance to unlock tax-free cash for your retirement.

While some lenders' criteria may differ, there are some universal eligibility factors that typically apply to all.

Our team of leading experts has searched the market for the most accurate and up-to-date equity release information to empower you.

We have mapped out what you need to know about the equity release criteria. 

Therefore:

Equity Release Eligibility in 2025: Personal and Property Criteria Explained

For equity release, applicants must meet certain age requirements, typically over 55, possess a property of sufficient value, and clear any existing mortgage or have a plan to do so.

The property must usually be in the UK and meet the lender's standards in terms of condition and marketability.

Key Personal Equity Release Criteria: Do You Qualify?

To be eligible for equity release in the UK this year, you must meet several key criteria:

• Minimum Age: You must be at least 55 years old. For joint applications, both applicants must meet this age requirement.
• Property Ownership: You must own a property in the UK, which serves as your main residence.
• Property Value: Your home must typically be worth at least £70,000, though some providers may set higher minimums.
• Mortgage Status: Any outstanding mortgage must be cleared, either before or as part of the equity release process.
• Property Condition: The property must be in good condition and meet the lender’s standards for saleability.
• Number of Owners: Most plans allow a maximum of two names on the title deed.

For a full breakdown of costs and eligibility, visit the Equity Release Costs Checklist.

Eligibility Criteria for Equity Release in the UK

To qualify for equity release in the UK, there are several crucial eligibility criteria you need to meet.

Firstly, you should be aged 55 or over. Next, the property you're releasing equity from must be your primary residence, located in the UK, and be worth at least £70,000.

Lastly, your property should be free from, or have a low level of, any outstanding mortgage.

In addition to these, some equity release providers may also impose additional eligibility criteria.

For example, they might assess your health and lifestyle when deciding how much equity you can release.

It's also common for providers to consider the type and condition of your property.

Remember, it's always wise to seek independent financial advice before entering an equity release scheme.

We understand these complexities and can guide you through the process.

Main Personal Criteria for Equity Release

The main equity release criteria are that the youngest homeowner must be 55 years or older. Additionally, there must be no more than two people on the property deed.

Your property must also be situated in the UK. It is important to note that equity release is not available in the Republic of Ireland.

The following should also be taken into consideration when applying for any equity release products.

What Is the Minimum Age for Equity Release in the UK?

The minimum age to apply for equity release is 55.

For joint equity release mortgages, this applies to the youngest applicant. 

How Much Equity Can You Release?

The amount of equity you want to release will help you determine if equity release is the right option for you.

Keep in mind that the maximum percentage of equity you can release from your home is usually 60% - 65% of the property value.

Does Your Health Affect Equity Release Eligibility?

No, your health will not affect your eligibility for equity release. 

In fact, it can be used as a positive.

Health conditions may increase the maximum LTV³ available and result in minimal interest rates if you opt for an enhanced lifetime mortgage.

What Property Criteria Determine Your Equity Release Eligibility?

Equity release property criteria include ownership and use of the property, it's location, and it's condition.

More information:

How Does Ownership and Use of Property Affect Equity Release Eligibility?

If you opt for a lifetime mortgage on your property, you have the right to stay in your home until you move into long-term care¹ or pass away.

However:

With a home reversion plan, you can sell all or part of your home while you continue to live there rent-free.

How Does Equity Release Work on Jointly Owned Property?

Equity release on a jointly owned property is possible if there are only two homeowners on the property title deed.

This way:

You and your partner can remain living on the property until you both pass away or move to long-term care.

Can You Obtain Equity Release With an Existing Mortgage?

You can obtain equity release with a mortgage, but you must settle it, as you are not permitted to have two loans on the same property.

You can do so either with your savings or with the equity release funds received.

Thereafter, you can spend the money in any legal manner you wish, with your financial adviser or broker's guidance.

Does the Location of the Property Affect Equity Release Eligibility?

The location of your property is something lenders consider.

If you live in mainland England, Wales or Scotland, you have access to all the equity release plans available, but other criteria may impact your eligibility. 

Some lenders exclude islands.

For example, you can not obtain equity release in the Isle of Man.

What Minimum Property Value Is Required for Equity Release?

The minimum property value for equity release plans is betweeen £70,000 and £75,000.

If your property is worth more than £1mln, additional underwriting checks² may be required.

How Does the Condition of Your Property Affect Equity Release?

The condition of your property will also be taken into consideration before providers agree to lend you money.

They will look closely at your property's condition and saleability, so it must be maintained to an acceptable standard.

Is It Possible to Rent Out Your House After Equity Release?

No, you can not rent out your house with equity release.

Important Note: Rules for tenants or lodgers differ.

You can have lodgers, although there could be a cap on how many.

But, you may not have tenants living on your property with equity release.

Is Equity Release Available on Leasehold Properties?

You can obtain equity release on a leasehold property.

However:

Lenders will have varied criteria when it comes to the remaining 'term' of your lease.

Common Reasons for Equity Release Refusal

While many homeowners meet the basic criteria, some applications are declined. Understanding why can help you prepare:

• Property Issues: Non-standard construction, poor condition, or location in a high-risk area can lead to refusal.
• Outstanding Debt: Significant mortgage debt or poor credit history may reduce your chances of approval.
• Age Restrictions: Applicants under 55 are not eligible, and some plans have higher minimum ages.
• Leasehold Complications: Short lease terms or complex ownership structures can be problematic.

If you’re unsure, a specialist adviser can help assess your situation and suggest alternatives.

Equity Release Options for Over-55s: Lifetime Mortgages and Home Reversion Plans

Homeowners have the option of lifetime mortgages, where they retain ownership and borrow against their home's value, or home reversion plans, which involve selling a part or all of the property for a lump sum or regular payments, while continuing to reside there.

What Types of Equity Release Schemes Are Available in the UK?

Homeowners in the UK can access two main types of equity release schemes: lifetime mortgages and home reversion plans.

Lifetime mortgages allow homeowners to borrow against the value of their property, retaining ownership and without requiring monthly repayments.

The loan, along with accumulated interest, is repaid when the homeowner dies or moves into long-term care.

Home reversion plans involve selling a part or all of the property to a reversion company in return for a lump sum or regular payments, while continuing to live in the home, rent-free, until death.

Each scheme offers distinct advantages and risks, tailored to different financial situations and goals.

Do Freehold Flats Qualify for Equity Release?

Yes, you obtain equity release on a freehold flat if you also own the leasehold.

If there is no lease in place, you can construct the leasehold title during the equity release process.

Can You Access Equity Release if You're Under 55? Alternatives and Limitations

Most equity release schemes in the UK require you to be at least 55 years old.

If you are under 55, equity release is generally not an option; instead, you may need to explore other financial products such as remortgaging or personal loans to access funds tied to your property.

If you are approaching the age of 55, it may be worth waiting until you become eligible for equity release.

In the meantime, consulting with a financial adviser can help you understand what alternatives are available and if equity release will be suitable for you in the future.

What Are the Costs of Equity Release in 2025? Fees, Interest Rates, and Charges

Equity release involves various costs, including interest rates that accumulate over time, setup fees covering advice, valuation, and legal costs, and possibly early repayment charges if the plan is settled before the agreed period.

What Are the Interest Rates and Costs Associated with Equity Release?

Equity release schemes, while providing a financial lifeline to many retirees, come with their own set of costs and interest rates that can significantly affect the homeowner's equity over time.

Typically, the interest on equity release products, such as lifetime mortgages, is compounded, meaning it accumulates over the years, increasing the final amount owed.

Interest rates can vary widely between providers and are influenced by market conditions and the borrower's circumstances.

In addition to interest rates, homeowners should consider setup fees, legal costs, and potential early repayment charges. These costs can diminish the total equity left in the home, impacting the estate's value for heirs.

It's crucial for potential applicants to understand these financial implications fully before proceeding.

How Are Equity Release Applicants Protected by UK Regulations in 2025?

The Financial Conduct Authority (FCA) regulates the equity release market, requiring transparent advice and fair treatment, while the Equity Release Council mandates a no negative equity guarantee and the right to remain in one's home for life, ensuring customers' protection.

What Regulations and Safeguards Are in Place for Equity Release Applicants?

The equity release market in the UK is regulated by the Financial Conduct Authority (FCA), ensuring that companies provide transparent and fair services to consumers.

Additionally, the Equity Release Council sets standards for product providers, including the "no negative equity guarantee," ensuring that borrowers will never owe more than their home's value.

Other safeguards include the requirement for independent legal advice and the right to remain in the property for life.

These regulations and standards are designed to protect consumers, providing peace of mind and security to those considering equity release as a financial option.

How Will Equity Release Impact Your Finances and State Benefits?

Releasing equity increases your liquid assets, potentially affecting means-tested benefits like Pension Credit and Council Tax Support.

The lump sum received is tax-free, but its usage, like investment, may have tax implications, necessitating careful financial planning.

How Does Equity Release Impact Welfare Benefits and Taxation?

Equity release can have implications for welfare benefits and taxation. Releasing equity from your home can increase your liquid assets, potentially affecting means-tested benefits such as Pension Credit and Council Tax Support.

It's important to assess how taking out an equity release plan could impact eligibility for these benefits.

On the taxation side, the money received from equity release is tax-free; however, how it's spent or invested may have tax implications.

For example, investing the lump sum in a way that generates income or capital gains could be subject to tax.

Consulting with a financial advisor is recommended to navigate these complexities.

How Equity Release Affects Benefits and Tax

Releasing equity can impact your finances beyond the immediate cash received:

• Means-Tested Benefits: The lump sum or increased savings may affect eligibility for benefits like Pension Credit or Council Tax Support.
• Tax Implications: The money released is tax-free, but investing it could generate taxable income or capital gains.
• Estate Value: Equity release reduces the value of your estate, potentially affecting inheritance tax planning.

For more on inheritance protection, see How Does Inheritance Protection Work With Equity Release?.

Alternatives to Equity Release: Downsizing, RIO Mortgages, and More

Alternatives to equity release include downsizing to a smaller property, remortgaging to access better terms or more suitable products, and personal loans, which might offer a more cost-effective way of raising funds without tying up property.

What Are the Alternatives to Taking Out an Equity Release Plan?

For homeowners considering accessing the equity in their homes, there are alternatives to equity release plans.

Downsizing to a smaller property can release equity without the need for a loan, providing a lump sum to fund retirement.

Remortgaging is another option, offering the possibility to borrow against the home with potentially lower interest rates compared to equity release.

Personal loans and retirement interest-only mortgages are further alternatives, each with their own benefits and drawbacks.

These options should be weighed carefully against personal circumstances and financial goals, ideally with the advice of a financial planner.

Common Questions

Final Thoughts: Are You Eligible for Equity Release in 2025 and Is It the Right Choice?

Whatever your reasons for wanting to release equity, it is important to obtain a better understanding of the market and the options available to you.

If you have made your decision and are confident that you meet the equity release criteria, talk to an equity release professional to find out how much equity you may receive from your house.