Equity Release Calculator

Most lenders use 3 simple criteria to determine the maximum amount they could lend you with a lifetime mortgage, the most popular type of equity release plan. This equity release calculator online criteria includes:

• The age of the youngest borrower (which must be at least 55)
• The value of the property (which must be at least £70,000 and located in the UK)
• The postcode of the property

There are also specialist plans that factor in your health too. These are called enhanced equity release schemes. If health factors suggest a potentially shorter life expectancy, providers can lend a higher amount. To calculate the size of your loan, you will need to complete a health and lifestyle questionnaire. The more severe your conditions are, the larger the loan will be.

Our exclusive cost of equity calculators provide a quick understanding of how much you could borrow across the complete range of lifetime mortgages, home reversion plans and retirement interest-only mortgages (RIOs). The specifics of the actual loan amount, however, can differ depending on the type of plan, lender, or another factor not considered by our equity calculators.

An equity release calculator works very differently from a standard mortgage or remortgage calculator, with each using a completely different set of criteria.

For example, when calculating residential mortgages, lenders use a range of criteria to calculate how much they will lend you. This includes your income, age, and credit history. Interest rates are typically based on the amount you want to borrow against the value of your home – which is known as the loan-to-value (LTV). Generally, the higher the LTV, the higher the interest rate.

With our online equity release calculators, the amount you can borrow is calculated using the age of the youngest applicant, the property value and, in some cases, your postcode and property type. The older you are, the higher the LTV becomes and the larger the maximum equity release will be.

Residential mortgage calculators also require you to pass individual lenders affordability criteria and credit checks. With an equity release calculator, no personal details such as these are required: your income and credit status are not typically part of the final calculation.

The maximum amount of tax-free cash you can borrow depends on the type of plan and the details of you and your property. For example, a lifetime mortgage is calculated using the age of the youngest applicant, the value of the property, and the postcode.

Beyond equity calculators, lenders are also becoming savvier in how they calculate loans, and some now factor in whether the property is a flat or maisonette and reduce the loan-to-value accordingly.

For instance, Legal & General will only consider 85% of the property value for flats and maisonettes when applying their LTV calculations. Aviva will also consider the tenure of the property and whether it’s freehold or leasehold. Should the property be leasehold, Aviva will calculate the maximum loan amount on how long the duration of the remaining lease is. If the lease term is shorter, they won’t lend as much.

The older you are, the more you can borrow too. For example, if your home is valued at £300,000, at age 5560, you can borrow a maximum of 27%* of the property's value (the LTV) - that's a maximum loan amount of £74.000. At age 80 it's 50%* - or £150,000.

Our free equity release calculators will only give you a rough estimate of the maximum loan amount available with a lifetime mortgage, home reversion plan or retirement interest-only (RIO) mortgage. For a specific maximum loan calculation, try our intelligent smartER research tool, which can calculate the maximum loan amount for every equity release scheme based on your personal criteria.

*Based on Capital Select Platinum Plus Plan from Canada Life on 20th April 2023

There are a number of factors that will affect your final mortgage balance on the day the equity release loan is repaid.

Lifetime mortgages run until the last person has died or moved into a long-term care facility. From the day the plan starts to the date of repayment, interest will be charged by the lender. Assuming no repayments are made, interest will compound over that period.

The final calculation of how much the equity release plan will cost is the interest rate charged by the lender against the amount of equity that’s been released. The equity release provider will charge interest on the amount borrowed either monthly or yearly until the loan is repaid.

Should the equity release plan be repaid early, an extra set of early repayment charges could potentially be incurred. These should also always be accounted for when calculating the true cost of how much a lifetime mortgage could cost over your lifetime.

You can request a key facts illustration (KFI) from your Equity Release Supermarket adviser, which demonstrates yearly what your future equity release balance will be.

The maximum percentage of the property that can be released largely depends on the age of the youngest homeowner – which is why our online equity release calculators factor this criterion into its assessment. The older the homeowner, the larger the percentage of equity can be released.

You can also release a larger percentage of equity with an enhanced lifetime mortgage. This plan takes into account your medical history and any existing conditions identified in a health and lifestyle questionnaire to calculate your life expectancy. A shorter life expectancy typically means a higher loan amount.

The qualifying criteria for equity release applications is broadly the same information that you provide in our equity calculators. This includes:

• You are over 55 years old
• You are a homeowner with property in the UK
• Your property is worth a minimum of £70,000

To find out more about whether or not you can release equity from your property, head over to our qualify for equity release page. If you’re ready to find out the maximum you can borrow, try one of our equity release calculators for free, with no obligation to continue your application.