Equity Release Criteria in Jan 2022

Equity Release Rules All Homeowners Should Know

Contributors: Nicola Date, Katherine Read. Edited by Rachel Wait & Reviewed by Francis Hui

We've Compiled the Most Important Equity Release Criteria & Rules. Find Out If You Qualify in This Easy Step-By-Step Guide To Help You Understand How It Works.

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6 Criteria for Equity Release You Need to Know

Don’t spend your hard-earned cash only to discover that you don’t qualify for equity release!

Every 12 seconds, a homeowner in the UK unlocks the cash tied into their home, and you could be next!

But, before you get too excited, you’ll need to know:

  • The 6 most important equity release criteria in Jan 2022.
  • The amount of equity you might be eligible to release.
  • If you can release equity with a bad credit score.

As authorities in our field, we’re here to give you FREE Jan 2022 equity release advice. Our expert team has looked into more than 220 equity release plans, researched all the regulated plan providers, and uncovered the frequently asked equity release questions regarding eligibility.

Let’s discover these right now!

What’s Equity Release?

Before continuing, check out this quick video of the most important information on equity release.

Learn More: How Does Equity Release on Your House Work?

Personal Finance Blogs

What is the Basic Equity Release Criteria?

The basic equity release qualification criteria are that the youngest homeowner must be aged 55 or older, your property must be located in the UK or surrounding islands, and you must own your home outright or only have a small lease left.

If I Qualify for Equity Release, Will I Qualify for All Plans?

No, you may not qualify for all equity release plans. Some plans only service certain parts of the UK and certain home reversion schemes have an age minimum of 60 or 65 years.

How Do I Discover if I Qualify for Equity Release?

While our detailed article will help you discover if you qualify for equity release, in theory, a financial adviser that specialises in equity release will help you determine if these plans could be the right step for you and your loved ones.

More information: Why Getting Equity Release Advice Is Essential

Personal Finance Blogs

6 IMPORTANT Equity Release Criteria Questions in Jan 2022

As a UK homeowner over the age of 55, you’ll likely qualify for equity release. However, there is some additional criteria that might be relevant to you.

Check these out!

1. Is There a Minimum & Maximum Loan Amount?

There is a minimum and maximum loan amount with equity release. The minimum is usually £10 000. The maximum loan amount will depend on the value of your property and your age. Some lenders will cap this amount, but others will refer your case to another lender, should you wish to exceed their cap.

Take note: The minimum amount can differ from one plan to another. Your financial adviser will have this information for you. Review equity release deals to find the best one.

Read more about: Types of Lifetime Mortgages to Consider

The Property Criteria

2. Do You Have to Have a Good Credit Score to Get Equity Release?

No, you generally don’t have to have a good credit score to get an equity release. Unlike traditional mortgages, you are not obligated to make any repayments in your lifetime with an equity release plan. Therefore, your past income and expenditure are not heavily scrutinised by lenders. However, some will request you pay any outstanding IVAs or County Court Judgments, using a portion of the equity you release.  

More information: Equity Release With Bad Credit 

The Homeowner’s Age

3. Can You Get Equity Release on All Property Types?

You can’t get equity release on all property types. However, most standard construction properties including houses, flats, and bungalows should qualify. Some lenders may consider additional criteria, like a 100% flat roof, those with some commercial activity, certain spray foam insulation, and properties with an annex. On the other hand, Lenders may decline concrete, timber-framed, and metal-framed properties, depending on the type and age of construction.

Equity Release Criteria & Rules You Must Know

4. Can You Release Equity From a Leasehold Property?

Yes, it’s possible to get equity release on a leasehold property. The lender will need to take into account how much time you have left on the lease, any ground rent and service fees, and any sell-on restrictions.

In addition, you can look at extending your lease as part of the equity release procedure if the current length doesn’t qualify. Note that this may incur additional charges.

But what about equity release with a mortgage?

the location of your home

5. Can You Release Equity From an Ex-Local Authority Property?

Yes, you can get release equity from an ex-local authority property. However, lenders will take into account the proportion of homes in the region that are still controlled by local authorities. If your home is leasehold and the freeholder is the council, you may be forced to buy the freehold to obtain equity release.

Interesting read: How the Equity Release Market Is Growing

Your Credit History

6. Does the Location of Your Property Matter With Equity Release?

Yes, the location of your home is taken into consideration by equity release lenders. You can access all plans if you live in mainland England, Wales, or Scotland. Currently, only two lenders provide equity release in Northern Ireland.

Got Questions? Check These First!

Who Qualifies For Equity Release?

How Old Do You Need to Be for Equity Release?

Do You Have To Be 55 For Equity Release?

Can One Release Equity if They're 54?

In Conclusion

Do you think that equity release might be the perfect way to give your retirement the cash injection of your dreams?

If so, be sure to understand all the equity release pitfalls in Jan 2022 and look at the equity release mortgage alternatives before making your final decision.

In addition, you must get in touch with an independent financial adviser to start your equity release journey and use our Online Home Equity Release Calculator to find out how much cash is tied up into your home!

Equity release can be a straightforward, stress-free process with the right guidance and a full understanding of the rules. What are you waiting for?

Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

rachel w

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
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Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
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Katherine Read
Consumer Affairs Writer

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.

Nicola Date
Writer & Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

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