Equity release: the benefits, the costs and the alternatives

Is equity release regulated, and who can advise on it?

Yes, it is regulated, and only a firm with permission for it can advise you. Lifetime mortgages and home reversion plans are both regulated by the Financial Conduct Authority, according to the Equity Release Council, and the FCA’s rules require advice before an equity release plan is taken out.

Advising on equity release is its own regulated activity, with its own qualification. Our guide to finding an equity release adviser you can trust sets out how to check a firm on the FCA Register before you speak to anyone.

What is equity release?

Equity release lets a homeowner aged 55 or over turn part of the value of their home into money without selling it or moving out. The common form is a lifetime mortgage: a loan secured on your home, and many plans need no monthly payments. The interest is added to the loan instead, and the loan and that interest are repaid from your estate when you die or move permanently into long-term care.

A home reversion plan works differently. You sell all or part of your home to a provider for less than its market value, in return for a lump sum or regular payments, and keep the right to live there.

What protections come with an equity release plan?

Plans from Equity Release Council members carry six product standards:

• The interest rate is fixed, or variable with a cap fixed for the life of the loan.
• You can live in the property for the rest of your life, or until you move permanently into long-term care.
• You can move to a suitable alternative property and take the plan with you.
• You can make repayments without being charged for doing so.
• Any early repayment charge is waived if you move permanently into long-term care.
• A no-negative-equity guarantee means you or your estate will not owe more than the property is worth, after reasonable sales costs.

The Council’s standards apply only to plans from its members, so it is worth checking that the provider is a member.

The Council also says that “all customers who take out equity release need to receive independent legal advice”, so you will have your own solicitor as well as the adviser.

How does the interest work on a lifetime mortgage?

Unless you pay it as you go, the interest is added to the loan and compounds, so the amount you owe grows over time, including interest on interest. Over a long period the balance can become much larger than the amount you first released, and that reduces what you can leave.

Some plans let you take money in stages, called drawdown, so interest is charged only on what you have taken. Under the Council’s standards you can also make repayments without being charged for doing so, which slows how the balance grows. A specialist adviser will show you a personal illustration of how the balance could change over time on the plan they look at for you.

Repaying a lifetime mortgage early is different: early repayment charges can be significant, so ask the specialist to explain them before you commit.

What alternatives will a specialist adviser look at?

The adviser has to consider other ways of raising the money before recommending equity release. The FCA’s rules name a local authority or other grant, and a further advance on an existing mortgage, as examples.

Other options often come up too. Downsizing releases money without a loan, but means moving home. A retirement interest-only mortgage keeps the balance level because you pay the interest each month, so it needs income you can show. An ordinary remortgage or further advance may be available, depending on your age and income. Help from family is another route some people talk through. The specialist will explain which, if any, could suit you.

Could equity release affect my benefits or what I leave?

It can. Releasing money from your home can affect your entitlement to means-tested benefits and your tax position. The specialist firm we introduce you to will check this with you before you commit.

Because the loan is repaid from your estate, it reduces what you can leave. Many people choose to talk it through with the family members who expect to inherit. For questions about tax, speak to an accountant.

What do I need before I ask for an introduction?

The youngest applicant needs to be at least 55. Before you ask, it helps to have:

• the property details and a rough idea of its value;
• who owns it, and whether anyone else lives there;
• the balance of any mortgage still outstanding;
• what the money is for, and whether you need it once or over time;
• the details of any means-tested benefits you receive.

An existing mortgage does not rule you out, but it has to be repaid from the money released.

How does an introduction through Lawes Financial work?

You tell us what you are trying to achieve. We introduce you to the specialist firm, and they give you advice and a personal illustration. The advice is theirs, not ours. You can check that firm on the FCA Register in the same way as any other.

If you go ahead, the firm we introduce you to pays Lawes Financial a referral fee. You don’t pay it, and it doesn’t affect the advice you receive or the terms you’re offered.

Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.

To ask for an introduction, use “Request an introduction” below.

Sources

Lifetime mortgages and home reversion plans are regulated by the Financial Conduct Authority; available from age 55; on a lifetime mortgage interest is rolled up and the loan is repaid from the estate on death or a permanent move into long-term care. Equity Release Council, What is equity release? (source), checked October 2026.

The six product standards and the independent legal advice requirement. Equity Release Council, Standards (source), checked October 2026.

Equity release transactions are listed as their own activity (item 21), separately from regulated mortgage contracts (item 20), and each requires a qualification. FCA Handbook, TC Appendix 1.1 (source), checked October 2026.

Advice required for equity release transactions (MCOB 8.2.2) and the duty to consider alternative ways of raising the money (MCOB 8.5A.6R). FCA Handbook, MCOB 8 (source), checked October 2026.

Lawes Financial Limited (FRN 1046161) is an appointed representative of Andrew Charles Consulting Ltd, which is authorised and regulated by the Financial Conduct Authority (FRN 304904).