Equity Release Maximum LTV in 2025: What to Expect
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- How much cash you can get out of your home depends on a few things like how old you are, how much your house is worth, your health, and where your house is. Plus, it matters what kind of plan you pick.
- The older you get and the more your house is worth, the more cash you can potentially unlock from it.
- If you have certain health issues, you may actually be able to release more, since some companies offer better deals if they think you may not need the loan for as long.
- Where your house is located can make a big difference too. If it is in an area of higher demand, you are likely to be able to release more.
- And finally, whether you go for a lifetime mortgage or decide to sell a part of your house (the home reversion plan), will determine how much of your home's value you can release.
If you have read that the average lump sum released on lifetime mortgages between October and December 2022 was £128,3821, you may be wondering what can affect the maximum percentage released.
It is a very valid question, as personal circumstances, property values, providers, and plans all influence the amount of equity you may be able to access.
In This Article, You Will Discover:
With a team of equity release experts constantly researching the market, SovereignBoss is here to help you find the answers to all your equity release questions.
Therefore...
What Determines the Maximum Percentage I Can Obtain From Equity Release?
Factors that determine the maximum percentage you may obtain from equity release are mainly your age and property value.
If you wish to calculate the equity release you can access, an equity release calculator can give you an estimate.
However, many additional factors impact the final percentage you may be offered, some of which are your health, property features, plan features, and whether you opt for a joint or single plan.
A closer look at these particular aspects...
Your Medical History
Your medical history could count in your favour when it comes to lifetime mortgages, but not in the way you may think.
With equity release, it is not good health that secures a better deal; on the contrary, underlying health conditions could get you a higher LTV.
When you begin your journey to release equity in the UK, you will be required to complete a medical questionnaire.
Depending on your answers relating to your lifestyle and whether you live with certain health conditions, your equity release broker or advisor may recommend looking at an enhanced lifetime mortgage.
Lifestyle factors and health conditions considered for enhanced plans may include:2
- High blood pressure
- Diabetes
- A history of heart attacks
- Angina
- Multiple sclerosis
- Smoking
Taking Out a Joint Equity Release Plan
Taking out a joint equity release plan with your partner could impact the loan percentage you qualify for, especially if your partner is younger than you.
If you and your partner co-own your property, a joint plan is your only option unless you are willing to change the property’s title deeds into a single name.3
Equity release loan percentages are always calculated based on the age of the youngest homeowner.
What does that mean for me?
Even if you are older and qualify for a higher LTV individually, calculations will be based on your partner's age if they are younger than you (but over 55).
What Your Property Is Constructed From
What your property’s constructed from is an essential factor for equity release providers as it will ultimately affect your home's current and future value.
Different providers have different criteria surrounding property construction, so discussing your options with a qualified equity release broker or advisor is important.
The Location of Your Property
The location of your property’s undoubtedly a consideration for equity release lenders as it could impact your home’s resale value.
If, for example, you live near a railway line or close to an industrial area, providers may not be willing to lend as much as they would if your property were located in a quiet residential area.
Plan Features
Certain features offered on equity release plans, such as drawdown facilities or inheritance protection, could attract a higher interest rate and affect the overall percentage you could release.
However, do not allow this to put you off, as some of the features offered could outweigh the cost implications.
You will need to go through this with your advisor or broker to determine the best plan for your needs.
Common Questions
What Factors Determine the Maximum Equity Release Percentage?
How Do Age and Property Value Impact the Maximum Equity Release Percentage?
Can My Health Condition Affect the Maximum Equity Release Percentage?
What Role Does Property Location Have in Determining the Maximum Equity Release Percentage?
How Does the Type of Equity Release Scheme Influence the Maximum Percentage Released?
In Conclusion
There is no denying that equity release can be daunting.
Whether you want to supplement your retirement or need the extra cash for home renovations, you will want to know how much you can borrow against your home.
With so many factors at play, a consultation with a qualified equity release broker or advisor can help you determine what may affect the maximum percentage you can release.