Considering equity release? 6 key questions to ask first

Published: October 16, 2026 at 10:39 AM

Growing numbers of homeowners are unlocking some of the wealth tied up in their homes to boost their finances, but if you’re considering equity release, it’s important to understand how it could affect you both now and in the future.

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According to the latest data from the Equity Release Council, equity release lending rose to £597 million between April and June this year, up 4% on the previous three months. The number of homeowners unlocking property wealth also increased by 4% to 13,489, including 5,307 homeowners releasing equity for the first time.

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Separate analysis from Canada Life suggests that people’s priorities are changing, with more customers using equity release to strengthen their finances rather than on non-essential spending.

Alice Watson, Head of Home Finance at Canada Life, said: “Fewer customers used equity release to fund big‑ticket items such as holidays and car purchases. Instead, we saw more customers using their property wealth to build financial resilience by clearing existing mortgages or consolidating debts.”

Questions to ask yourself before releasing equity from your home

  1. What are the alternatives to equity release?

Before signing up for equity release, it’s worth considering whether there are other ways you might be able to give your finances a boost. Depending on your circumstances, alternatives could include downsizing, using savings or investments, or reviewing your existing mortgage or other borrowing.

  1. How much do I need to borrow?

When releasing equity from your home, it can be tempting to take a larger lump sum than you need, especially if you own a significant amount of equity in your home. However, it’s important to remember that when you take out a lifetime mortgage, the most popular type of equity release plan, interest is typically added to the loan, which means the amount you owe can grow over time. Borrowing only what you need may help limit the impact on the value of your estate.

  1. How will it affect any inheritance I want to leave?

Releasing money from your home can reduce the amount that you leave your loved ones when you die, so it’s worth letting your family know about your plans. You can’t release equity from your property without seeking professional advice first, so it’s worth asking your adviser to show you how different borrowing amounts and interest rates could affect the value of your estate over time.

  1. How much will it cost me?

Don't just look at the amount you can release. Find out the interest rate, whether it is fixed for life, what fees apply and how the debt could grow. You should also check whether you can make repayments if you want to, and whether there are any early repayment charges.

For example, ssuming you release £60,000 from your home via a lifetime mortgage at a fixed compound interest rate of 6.5% AER, after five years, assuming no repayments are made, your total debt would have grown to roughly £82,205 due to rolling-up compound interest, and after 10 years to around £112,628, almost twice the amount you borrowed initially.

  1. Could it affect my benefits?

Taking a lump sum or regular payments could change your entitlement to some means-tested benefits, so it's important to understand the consequences before going ahead. Your adviser should take your wider financial circumstances into account and let you know whether any benefits you receive will be affected..

  1. What happens if my circumstances change?

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Equity release might seem like the right decision now, but it’s worth thinking about what might happen if you want to move house in future, or need to repay the loan early. Make sure any product you’re considering signing up for offers the flexibility you might need in future.

Get your FREE guide to equity release written by RT's Paul Lewis

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