UK Equity Release Lifetime Cost Calculator

Enter your current age and the current estimated market value of your home. These two inputs drive how long the projection runs and how much equity is available to release. Use a realistic market estimate — not an optimistic asking price — for conservative planning.

Enter the lump sum or initial drawdown amount you are thinking about, not the maximum your lender might offer. Releasing less creates less compounding debt. Consider starting with the minimum you genuinely need and projecting the impact before deciding on a larger amount.

Lump sum: the full amount is released on day one and interest rolls up on the total from the start. Drawdown: you take smaller amounts over time, and interest only rolls up on what has been drawn so far — this can significantly reduce total debt. Interest-payable: you make monthly interest payments, so the loan balance stays flat; this needs qualifying income and is less common.

Enter the fixed annual interest rate from your adviser or lender quote. Enter an annual property price growth assumption (the long-run UK average is around 3–4%, though actual growth varies by region and year). Enter the lifespan for the projection — 20–30 years covers most scenarios for people releasing equity in their mid-60s.

The chart shows three lines over time: the growing loan balance, the projected property value and the residual estate equity (the difference). Note the point where the loan balance begins to approach the property value — that is where the no-negative-equity guarantee would kick in under a qualifying product.

Look at the equity remaining at ages that matter to you — perhaps 85 or 90. If you want to leave an inheritance or have a care cost reserve, this figure tells you how much may still be in the estate. If the residual equity is lower than you expected, try reducing the release amount or choosing drawdown instead of a lump sum.

Enter a realistic smaller property cost to see how much equity you could release by selling and downsizing instead. This comparison helps you weigh the lifestyle disruption of moving against the financial cost of a lifetime mortgage. For many people, downsizing at 65 or 70 produces more estate equity than equity release would at the same age.

In a lifetime mortgage, the annual interest rate is applied to the outstanding loan balance at the end of each year, and the result is added to the loan rather than paid. In the following year, interest is applied to the larger balance — meaning you are paying interest on interest. This is the same effect as a savings account growing in reverse.

For example, a £50,000 loan at 5% annual interest with no repayments would grow to approximately £53,000 after one year, £55,900 after two years, and around £163,000 after 25 years. Drawdown products slow this growth because you do not draw the full amount upfront.

The Equity Release Council is the trade body for the UK equity release sector. Products from member firms must include the no-negative-equity guarantee, a fixed or capped interest rate, the right to remain in the property for life, and the option to move the mortgage to a new property if it meets the lender's criteria.

Always check whether a product you are considering carries the Equity Release Council label. Non-member products may not carry the same consumer protections, and the terms can be significantly different.

Money released from your home is not taxable income. However, if it is kept as cash savings, it may be counted as capital when assessing eligibility for means-tested benefits such as Pension Credit or council care-cost contributions. Releasing equity can reduce entitlement to these benefits depending on how the money is held and used.

Speak to a benefits adviser alongside your financial adviser before proceeding, particularly if you currently receive or might in future apply for means-tested support. The impact on inheritance tax should also be reviewed if your estate is close to the nil-rate band threshold.