Equity release for under 55s: what are your options?

How do I release money from my house
How can I release money from my house?
8th November 2019

Equity release for under 55s: what are your options?

Equity release can be a fantastic way to free up cash that is tied up in your property – with options including taking a lump sum, or receiving the payments in small amounts over a number of years. However, you might be surprised to learn that there are specific restrictions regarding age.

It is becoming more common that people under the age of 55 are looking into options regarding their mortgage. Indeed, many are exploring the possibility of releasing equity from their property. But 55 is used almost universally by lenders as the minimum age for equity release in the UK.

So, does that mean that you really can’t consider equity release under 55?

Is 55 the minimum age for equity release?

It is generally accepted that 55 is the minimum age that you can release equity from a property – and this is true for the youngest applicant in a joint mortgage. This means that both partners need to be over the age of 55 to be accepted for equity release.

This might be frustrating if you feel that equity release is the right choice at this point in your life – regardless of your age. Thankfully, however, while lenders are strict on enforcing this minimum age on equity release, there are some other options available. Of course, every situation is different and if you would like advice, speaking to an equity release specialist could be the best move.

Could remortgaging be an option for you?

An alternative option to equity release is remortgaging. If you are not currently locked into a fixed rate deal you could remortgage your property – this could be staying with the same mortgage provider or transferring to another – but in this scenario it typically involves taking a larger loan in order to be able to borrow extra cash.

This can sometimes work out as a favourable way to borrow money compared with personal loans. You can typically use the extra money you take out when you remortgage for any purpose, so it would give you the same flexibility.

What are the other options?

There are many reasons that you might want to release equity from your property – it may be that you want to make improvements to the property for your own enjoyment, or you could be interested in buying a share in the freehold. Alternatively, it may have nothing to do with the property itself, and you may wish to pay off debts or invest in a different venture.

In any case, it is important to understand whether you are making the right financial decision. There are many different options available that could be suitable for your needs.

It could be that taking out a personal loan or a secured loan may make sense in your specific circumstances. So, it is important that you take independent financial advice in order to understand what might work in your case. These options, as well as remortgaging, are available to customers at almost any age, so if you are too young to be accepted for equity release, you might find that they could work for you instead.

John Whyte specialises in equity release and later life mortgages – get in contact for a free consultation if you are looking to plan your next financial move.

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