Equity Release: What You Need to Qualify

Thinking about equity release? The rules can feel like a maze, but understanding the basics can save you loads of time and hassle. First things first, equity release isn’t open to everyone. There are some pretty clear requirements, and missing even one can stop your plans cold.

Lenders usually set a minimum age—55 is the magic number for most, but some want you to be older. And it’s not just your age they care about. Your house has to check certain boxes too. You don’t need a mansion, but there are rules on value, type, and even the condition of your home. Got a quirky property? That might throw a wrench in things.

If you think income and credit score don’t matter here—think again. Sure, you don’t pay monthly like with a regular mortgage, but lenders still look at your finances. Why? They want to be sure you keep up with any obligations, like insurance or maintenance. Skip these, and you risk the whole deal falling apart.

• Who Can Apply for Equity Release?
• Property Requirements
• Financial Checks and Obligations
• Practical Tips and Common Surprises

Who Can Apply for Equity Release?

If you're wondering whether you can even get started with equity release, it's all about meeting some straightforward rules. The main one? Age. Most providers in the UK set the lowest age at 55, and that's non-negotiable. Applying at 54? You'll be told to come back next year. Some lenders even set the minimum at 60 or above for certain products.

Married or living with your partner? Both of you need to meet the age rule if the plan is in both names. That trips up more couples than you’d think. It gets even trickier if you’re co-owners with someone who’s younger, like a child or sibling—the youngest owner’s age is always the one that counts.

Here’s a quick table for what most lenders ask for:

Lenders also care if your property is your main home—you can’t release equity on a second house, holiday home, or rental. Staying in your home long-term is a must, as equity release plans count on you living there until you die or go into care. If you’re planning to move or spend months abroad each year, you might not qualify.

One last thing: some health conditions can actually help. A few providers offer "enhanced" deals if you have medical issues or a lower life expectancy, weird as it sounds. They’ll offer you more money or better rates. So it’s worth digging out those medical records during your research.

Property Requirements

If you're eyeing equity release, your home's details matter just as much as your age. Lenders aren’t handing out cash for any old building—they’ve got checklists, and you want to tick every box to avoid disappointment.

First up, your home usually needs to be in the UK, and it must be your main residence. Second homes, buy-to-lets, and holiday homes tend to get the cold shoulder. Most lenders want the property to be worth at least £70,000 (some go as low as £50,000, but that’s rare). Homes under this threshold are usually a no-go.

The property's structure is key. Standard brick and mortar construction is their top pick. Got a prefab, a flat above a shop, or something with a flat roof? Prepare for extra scrutiny or rejection. Leasehold properties are sometimes accepted, but lenders want plenty of years left on the lease—usually at least 70 years at the time of application—so check that before you get your hopes up.

If your house needs major repairs or has structural issues, lenders may pull the brakes until everything’s sorted. You can’t usually get equity release on a home that’s uninhabitable or mid-renovation.

• Your home must be in good condition and insured.
• You need to have cleared (or be able to clear) most other outstanding mortgages—equity release can cover the last bit, but not if you’re buried in debt.
• Sometimes, properties over commercial premises or with land over five acres make lenders nervous.

Just for a quick overview, here’s a table with the common property must-haves:

And here’s something a lot of people miss: If you’re in a quirky home—a converted barn, a thatched cottage, or anything out of the ordinary—always check with a specialist broker first. They can tell you if your property is likely to pass, or save you wasted effort if it’s not.

Financial Checks and Obligations

You can’t get around the paperwork. When you apply for equity release, lenders want to see proof you can handle the basics—even if you won’t be making regular payments like with a normal loan. They run some financial checks, but don’t panic: they don’t use the same strict rules as banks do for mortgages. Here’s what really happens.

Lenders check for things that could stop you from keeping up with the weird little extras—think council tax, home insurance, and basic house maintenance. Miss those? You could end up breaching the deal, which can get expensive fast.

They’ll look at:

• Credit history: No, you don’t need a perfect score, but recent bankruptcies or missed payments on big debts could be a red flag.
• Existing loans on your home: If you’ve got a traditional mortgage, you might need to pay it off with part of the equity you release.
• Income and outgoings: Some lenders want proof you can still pay the ongoing costs of owning your home, even after you release cash.

One surprising thing: each lender can set slightly different criteria. Some are picky about income, others care more about your spending, and a few might even want to see your recent bank statements.

Tip: If you’re worried about your financial history, ask your adviser to recommend lenders who aren’t as strict. And before you start, pull your own credit file—fixing any mistakes can help things move faster.

Practical Tips and Common Surprises

Equity release isn’t just paperwork and signatures. There are a few tricks and surprises along the way that can really shape your experience. Here’s a rundown of what often catches people off guard, plus my best advice for a smoother process.

• Equity release can impact your eligibility for means-tested benefits. Even a small lump sum or drawdown can tip you over the savings limit for pension credit or council tax support. Always check this before signing anything.
• Lenders usually insist you pay off any existing mortgage first. If what you owe is more than the amount you can release, you’ll have to make up the difference yourself.
• Don’t be surprised if your chosen provider asks for a building survey. Homes with flat roofs or homes of non-standard construction (like ex-council flats or timber frames) are often declined or get lower valuations.
• You need to see an independent solicitor. This isn’t just red tape – the law requires it. It protects you from pressure and makes sure you understand exactly what’s going on.

If you have kids or plan to leave an inheritance, bring them into the loop early. Equity release will reduce the value of your estate and can make for some awkward family chats if it’s a surprise later down the line. Some plans let you set aside a portion to ring-fence for inheritance—worth asking about!

One thing that really shocked me when Graham and I looked into this: some plans charge early repayment penalties that last for years. That means if you change your mind or want to downsize, you could get hit with a chunky fee. Always ask about exit charges, and don’t settle for half-answers.

Last tip? Don’t leap at the first offer. Compare several providers, check the interest rates, and look for one with a “no negative equity” guarantee. No one wants their family saddled with debt if house prices drop. Ask awkward questions—reputable brokers are happy to explain the small print.