Is equity release a good idea? Pros and cons

Provided by Is equity release a good idea? Pros and cons Accessing tax-free cash can have benefits - but there can be downsides too. Save Add us as preferred source Share article Log in or Subscribe Copy link X Icon twitter Facebook Icon facebook WhatsApp Icon whatsapp email Provided by Commercial content by TMG Financial Solutions team Published 27 July 2026 4:47pm BST Save Share article Log in or Subscribe Copy link X Icon twitter Facebook Icon facebook WhatsApp Icon whatsapp email Add us as preferred source Commercial content by TMG Financial Solutions team Published 27 July 2026 4:47pm BST Save Share article Log in or Subscribe Copy link X Icon twitter Facebook Icon facebook WhatsApp Icon whatsapp email Is equity release a good idea? Releasing equity from your home may be an option in certain circumstances, depending on your individual needs and financial situation. If you are considering this path, it’s important you know the advantages and disadvantages so you can make an informed decision. How safe is equity release? When weighing up the pros and cons, one of your biggest questions might be whether equity release is safe. There are several myths about equity release, so this is a common concern. You should make sure that any company or adviser you are dealing with is a member of the Equity Release Council. This is the industry trade body that sets standards for equity release products. Royal London Equity Release Advisers, the provider of the Telegraph Media Group Equity Release Service, is a member of the Equity Release Council.  Considerations can vary depending on the product you choose, whether that is a lifetime mortgage or a home reversion plan. This article will focus on the pros and cons of lifetime mortgages, the most popular equity release product. Benefits of equity release Receive tax-free cash With equity release, you can unlock tax-free cash from your home without having to move. You can choose to use this money in any number of ways, from gifting to your grandchildren to paying off an existing mortgage.  A lifetime mortgage is a loan secured against your home. It will reduce the value of your estate and could affect your entitlement to means-tested benefits. Control your payments When releasing equity with a lifetime mortgage, you are in control of your payments. You might choose to make no payments and let the interest build up over time. Or, you might want to make payments to clear the interest or reduce the amount owed. Depending on the product selected, borrowers may be able to repay up to 10% of the original loan amount each year without incurring an early repayment charge.  Some lifetime mortgages allow optional repayments to be started, reduced or stopped without an early repayment charge, subject to product terms and conditions. Flexible features Lifetime mortgages can offer a variety of features, ranging from inheritance protection, which may allow part of your property's value to be preserved for beneficiaries, to fixed or defined early repayment charges, which can provide greater certainty over the potential costs of repaying your loan early. Disadvantages of releasing equity Reduced estate value Equity release will reduce the value of your estate. With compound interest, the amount you owe will increase over time and further reduce the value of your estate. If you’re considering equity release, it is required to consult an adviser. They can explore all of your options and help you understand which solutions may be suitable for your circumstances. Impact on means-tested benefits Borrowing a tax-free sum from your home may affect your entitlement to means tested benefits. Your adviser will help you to consider this before you make a decision to proceed. Equity release can be an expensive way to borrow The interest rate charged on a lifetime mortgage is typically higher than that available on some other forms of secured borrowing. Interest is added to the loan over time, which means the total amount owed can grow significantly, particularly if no repayments are made. It's important to consider the long-term cost and discuss all available options with a qualified adviser before proceeding. Is equity release right for you? Speaking to a qualified adviser is a required part of the equity release process. An adviser can explain the options available when it comes to using your property wealth. Royal London Equity Release Advisers can help you decide whether equity release is the right option for you. They offer no-obligation appointments to discuss lifetime mortgages, retirement interest-only mortgages and more traditional mortgage types. They don't offer advice on other forms of borrowing such as credit cards or unsecured loans. However, one of these options may be more suitable depending on your circumstances. If you choose any mortgage that requires regular payments, your home could be at risk of repossession if you miss payments. Use the equity release calculator to get an idea of the amount that could be available to you with a lifetime mortgage. If you choose to include your phone number, the Information Team can get in touch to answer any questions you might have. If you are eligible, they can also get you booked in for an initial consultation appointment with an adviser. Frequently asked questions Is there a better alternative to equity release? There are alternatives to equity release available. In terms of borrowing, there are other products such as retirement interest-only mortgages available. This would involve agreeing to pay off the interest every month. You might also consider using other sources of funds, such as savings or investments. Whether these are better choices than equity release would be best determined with the help of an adviser, who would consider each option against your personal circumstances. What is the catch of equity release? There is no catch with equity release. Equity release advisers will explore both the positives and negatives of the product before potentially recommending it, so you will understand exactly how it could work for you. Royal London Equity Release Advisers will provide you with a personal illustration as part of the process, showing you the costs involved. Your adviser will also explore how releasing equity will reduce the value of your estate and potentially affect your entitlement to means tested benefits. You will have as much time as you need to fully consider the pros and cons. If you’re interested in discovering more on whether equity release is right for you, you can get in touch with Royal London Equity Release Advisers today. Simply use the online calculator or give them a call on 0330 162 4672. Lines are open Monday 08:30am to 18:00pm and Tuesday to Friday 08:30am to 17:30pm. Read more: Equity release FAQsEquity release mythsAsset rich but cash poor?   The above article was created for Telegraph Financial Solutions, a member of Telegraph Media Group. For more information please click here.  Equity release is only available to homeowners that own a property within the United Kingdom.  If you choose a mortgage with required payments during your lifetime, your home may be repossessed if you do not keep up with the payments. Borrowing with a lifetime mortgage or retirement interest-only mortgage will reduce the value of your estate. Receiving a cash lump sum may also affect your entitlement to means-tested benefits. Think carefully before securing other debts against your home. The Telegraph Media Group Equity Release Service is provided by Royal London Equity Release Advisers. Royal London Equity Release Advisers is a trading style of Responsible Life Limited which is registered in England & Wales. Company No. 7162252. Registered Office: Princess Court, 23 Princess Street, Plymouth, PL1 2EX. Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (https://register.fca.org.uk/) under reference 610205. Responsible Life Limited is a wholly owned subsidiary of the Royal London Group who may benefit if you choose to take regulated mortgage advice. Being a wholly owned subsidiary of the Royal London Group does not alter Responsible Life Limited’s regulatory responsibilities. Only if you choose to proceed and your case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,890. Their adviser will talk through the setting up costs before you choose to proceed. Advertisement LEARN MORE ABOUT EQUITY RELEASE Is equity release a good idea? Pros and cons 27 Jul 2026, 4:47pm Sponsored