Determining the percentage you can get on equity release is not as clear-cut as you may think. 

While more than 93,000 over 55s released money from their homes in 2022¹ through equity release, specific factors would have determined each customer’s loan-to-value (LTV) ratio.

SovereignBoss is a leading equity release information portal, and we are here to help you understand what exactly determines the loan percentage you may be able to achieve.

Therefore... 

What Percentage Can I Borrow With Equity Release?

The percentage you can borrow with equity release is expressed as your loan-to-value (LTV) ratio. 

With a lifetime mortgage, you can expect an LTV of between 20% and 60% of your property value.²

In contrast, home reversion plans allow you to sell up to 100% of your home, but the sale price will be below market value, so you will only be able to access a smaller percentage of the property's value. 

Each option has it's pros and cons, which should be carefully considered during discussions with a qualified equity release broker or advisor. 

What Determines the Equity Release Percentage I Can Obtain?

The equity release percentage you can obtain is determined by several factors, including your age, your health, the value of your property, and any outstanding loans against your home. 

See below for a closer look at each of these factors to better understand how they impact the amount you can borrow should you decide to release equity.

Your Age

Your age has a surprisingly significant influence on the amount you may be able to borrow through equity release.

To start with, you must be at least 55 to qualify for any equity release products on the market.³

Generally, the younger you are, the lower the percentage you can release.

This is because you are likely to live longer, which means it will take your provider longer to recoup it's investment.

Health Conditions and Lifestyle Factors

Health conditions and lifestyle factors can affect the type of equity release plan you qualify for and consequently the maximum LTV you can achieve. 

Although each lender will have it's own criteria, certain health conditions could mean you are eligible for an enhanced lifetime mortgage. 

Such conditions could include:⁴

• Having had a heart attack
• Having had a coronary artery bypass graft
• Angina
• Having had a stroke
• Multiple sclerosis

With an enhanced lifetime mortgage, you may generally be able to access a higher LTV or a lower interest rate. 

You should discuss the specifics with your equity release advisor to find the most beneficial plan and provider for your circumstances. 

Value of your Property

The value of your property is one of the main determining factors when it comes to the amount you may be able to release from your home.

The higher your property value, the more equity you may have access to.

The more equity you can access, the more you may be able to borrow through equity release. 

To receive an official quote from any provider, your home will require a professional valuation. 

The valuator will take into consideration factors such as:⁵

• The location of your property
• The condition of your property
• The structural integrity of your property
• The possibility of future rezoning or development in the area
• The building material used in the construction of your property

Once your property has been valued and deemed suitable, you will receive an offer from your equity release provider. 

Why is this necessary?

Equity release providers need to be sure that they are able to recoup the amount they invest in your loan, so your provider will want to establish the value and condition of your home.

Outstanding Debts

Outstanding debts, like a mortgage, may affect the amount of equity you can release as well as the amount of cash you may have left at your disposal. 

Why is that the case? 

If you have an existing mortgage on your home, you will own less equity than you would if you owned your home outright, which will negatively affect the amount you can borrow. 

In addition to this, it is a condition of equity release that any outstanding mortgage be repaid with the funds released.⁶ 

What does that mean?

Basically, you would not only be able to access a smaller loan amount, but also need to use a portion of the funds released to pay off your existing mortgage. 

A consultation with an equity release broker or financial advisor will help determine whether accessing the equity available in your home would be worthwhile. 

What are the Minimum and Maximum Percentage Limits on Equity Release?

The minimum and maximum percentage limits on equity release are determined by your individual circumstances. 

In general, however, a lifetime mortgage could give you access to between 20% and 60% of your home’s value. 

A home reversion plan could help you access up to 80% of your home’s value – although this will be based on a sale price below market value. 

In terms of monetary value, certain providers have an upper lending limit of £1mln and a minimum lending amount of between £10,000⁷ and £15,000 with a lifetime mortgage.

What Equity Release Percentage Can I Obtain Based on My Age?

The equity release percentage you can obtain based on your age is not the same for everyone. 

In other words, two people of the same age applying for the same lifetime mortgage on properties of the same value will not necessarily achieve the same percentage. 

If you would like to see how equity release amounts change based on your age, try out our equity release loan calculator.

A number of alternative factors will be considered when determining the final figures; not just your personal circumstances but also the provider and the type of product you choose. 

Review the information below to obtain an idea of how age can impact your LTV percentage

How Much Equity Can You Release at Age 55?

At age 55, you could potentially release around 23% of your property’s value.⁸

That means that if your home is valued at £200,000, you could borrow £46,000 with equity release.

How Much Equity Can You Release at Age 65?

At age 65, you could release in the region of 33% of your property’s value. 

Using the same property value as above for ease of comparison, if your home is worth £200,000, you could access £60,000 with equity release. 

How Much Equity Can You Release at Age 75?

At age 75, you could potentially release 43% of your property’s value. 

With a property valued at £200,000 equity release could provide you with access to £86,000.

How Much Equity Can You Release at Age 85?

At 85, you may be able to access in the region of 50% of your property’s value. 

That means you could borrow £100,000 on a property worth £200,000 using equity release.

*Please note that the above figures are purely used to indicate the relationship between your age and the amount you could borrow. For a more accurate estimate, you should consult an equity release mortgage broker or financial advisor.

Should I Release as Much Equity as Possible?

Whether you should release as much equity as possible depends entirely on your current situation and future financial goals. 

Things you should consider: 

• How you plan to use the money released.
• Whether you are taking the money as a lump sum or are opting for a drawdown facility.
• The interest rates you can achieve.
• The impact on the inheritance you leave to your loved ones.

Borrowing the largest possible amount of money should usually only be considered as a last resort, but all the above-mentioned factors will be taken into consideration during your first consultation with an equity release broker or advisor. 

Common Questions

In Conclusion

Equity release can be a complicated affair, and a life-changing financial commitment therefore, you need to ensure you get right. 

As we have seen in this article, so many variables impact the amount of money you can access, with your age and property value being the main ones. 

A consultation with a qualified equity release broker or advisor will enable you to consider all the necessary factors and determine what percentage you can obtain on equity release.