I’m sure you will agree that when it comes to a better understanding of what the best equity release interest rates in 2023 are, and how an equity release scheme works, it can get confusing.
In this article, we answer the important questions that you may have about the best equity release interest rates.
The key topics in this guide will help explain it all to you in a very straightforward way. In this article, you will find:
The best equity release rates, particularly for a lifetime mortgage, are generally higher than standard mortgage rates.
Typically, when it comes to equity release best deals, they have historically been between 3% and 7%. However, this is always dependant on interest rates at the time you want to take out a product, so the rates you get can be higher or lower.
The rate and plan you are offered are subject to your individual needs and circumstances and are subject to lender approval.
All the companies that offer equity release plans will be authorised and regulated by the Financial Conduct Authority, which will give you some confidence even if you have never heard of the provider.
The financial conduct authority is the body that ensures the providers all operate fairly and within the rules that are set down.
As a further confidence factor, all the major providers are also members of the Equity Release Council, which is the industry body for the equity release sector in the UK.
There is a significant range of interest rates for equity release; therefore, you need to try and find the best rate for your circumstances. Also, many of the most valuable deals are not available through searching online.
Since the schemes are offered on a different basis than standard mortgages, they also provide additional guarantees and fallbacks, such as measures to prevent paying more in the event of a negative equity situation.
When it comes to looking at your options, it is essential that you compare equity release options in the market. The range of rates available, between lenders, can be substantial.
Therefore, you should compare equity release schemes and deals, as it is essential to make sure you get a deal that is right for your circumstance.
The table below shows you some of the best equity release rates, as at December 2023, for lifetime mortgages, from some of the leading equity release providers in the UK.
These rates may have changed since this table was updated and should be taken as indicative only. There may also be other providers not listed on this table that could offer better deals. In addition, the providers and products noted below may not be right for your particular circumstances. Therefore, we strongly recommend that you speak to an equity release adviser, who will be able to provide you with information on the latest rates, that are applicable to you.
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| Product Name | Interest Rate | Type of product | Offers |
|---|---|---|---|
| Just For You – J2.5 | 6.22% | Fixed | Free ValuationNo application fee |
| Just For You – J1 | 6.30% | Fixed | Free ValuationNo application fee |
| Premier Flexible Pearl | 6.43% | Fixed | Free Valuation |
| Premier Optional Payment Pearl | 6.43% | Fixed | Free Valuation |
| Horizon 240 Drawdown | 6.43% | Fixed | Free Valuation |
| Classic Drawdown Super Lite 2 | 6.47% | Fixed | Free Valuation |
| Horizon 260 Drawdown | 6.47% | Fixed | Free Valuation |
| Classic Elite Drawdown Super Lite 2 | 6.47% | Fixed | Free Valuation |
| Premier Flexible Pearl | 6.48% | Fixed | Free Valuation |
| Premier Optional Payment Pearl | 6.48% | Fixed | Free Valuation |
| Horizon 240 Drawdown Fee Free | 6.49% | Fixed | Free ValuationNo application fee |
| Classic Drawdown Super Lite 1 | 6.52% | Fixed | Free ValuationNo application fee |
| Premier Flexible Pearl | 6.52% | Fixed | Free Valuation |
| Premier Optional Payment Pearl | 6.52% | Fixed | Free Valuation |
| Classic Elite Drawdown Super Lite 1 | 6.52% | Fixed | Free ValuationNo application fee |
| Flexible Pearl | 6.53% | Fixed | Free Valuation |
| Optional Payment Pearl | 6.53% | Fixed | Free Valuation |
| Enhanced Lifestyle Flexible Option | 6.53% | Fixed | Free ValuationNo application fee |
| Horizon 260 Drawdown Fee Free | 6.55% | Fixed | Free ValuationNo application fee |
The equity release rates have been sourced from Equity Release Supermarket. These indicative rates and incentives may have changed since this article was last updated. Therefore, they should only be taken as a guide and we cannot guarantee their current accuracy. Please also note that we do not provide advice on or endorse any particular product listed here. The rate you are offered will depend on your individual circumstances and subject to lender approval. We recommend that you speak to an equity release advisor to see what the best options are for you.
If you take out a product with Age Partnership, we will receive a fee for introducing you to them. By contacting Age Partnership through us, the cost of any equity release product would be the same as if you had contacted them directly. The fee we received is used to help keep our site operational and to produce new content.
If you are interested in finding out about what equity release mortgage rates might be available for your circumstances, then please speak to an adviser.
Call Boon Brokers on 0333 567 1607 to discuss your equity release requirements.
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All equity release and mortgage advice is provided by Boon Brokers Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
If you take out a product with Boon Brokers, we will receive a fee for introducing you to them. Boon Brokers provides advice for free and without obligation. By contacting Boon Brokers through us, the cost of any equity release product would be the same as if you had contacted them directly.
The fee we receive is used to help keep this site operational and to produce new content.
Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
To put it into simple terms, equity release is a way of taking a lump sum, tax-free from the value of your home. It is a type of mortgage and the most popular type is a lifetime mortgage.
You can do this in a number of different ways but in essence, you take out a policy/mortgage that allows you to take equity (ie cash) tied up in the property value.
You can apply for this if you are over 55 and importantly you do not need to have paid your existing mortgage off to do this.
Generally, when it comes to taking the cash, you can do it as a single large lump sum, split into smaller amounts or a combination of the two.
You can see a video on how equity release products work and interest rates here.
Alternatively, here is a short video that explains what an equity release mortgage is.
When stripped back to basics, equity release schemes work by enabling you to release cash (known as ‘equity’) currently tied up in property assets.
This makes it an attractive choice for those over 55 who wish to use the capital to enjoy retirement or set some aside for imminent or future care needs.
It works similar to a mortgage by lending homeowners a lump sum or regular income (usually on a monthly basis), in return for a portion of their property. Money is lent against a value of less than the property value, and interest is accrued on the amount you borrow.
Typically, when you die your estate will sell the house and the mortgage is repaid using the housing wealth built up.
Whilst the benefits are clear, they won’t be suitable for everyone. They are, however, a fantastic option for couples and individuals without cash savings or additional assets, who would like to use money currently tied up in their property value to pay for care.
You are free to use the money that you receive. The most popular options are:
The interest rate on equity release schemes are calculated in a number of different ways.
This means the interest rate remains the same for the duration of the schemne.
The interest rate is determined at the outset and won’t change over te course of the loan, so you know exactly how much will be added to the loan over time.
This is the more common type of interest rate for equity release products in the UK.
This means the interest rate can change over time.
The rate is typically linked to an external benchmark, such as the Bank of England base rate, plus a fixed margin on top.
There should be a “cap” or “ceiling” on how high this rate can go to protect consumers.
The interest on equity release products is also compounded, which means that interest is charged on the original amount borrowed, and any previous interest added on top. This can cause the amount owed to grow quickly over time, which is a crucial aspect for homeowners to understand before entering into an equity release agreement.
This is why it’s important to understand the interest rates on equity release before entering into an agreement.
You need to be a homeowner to apply for equity release lending. You do not need to own the home outright, so a house with an existing mortgage still makes you eligible.
Most loan products are only open to those over the age of 55. However, you should note that the earlier you take out the load, the longer the period of time in which the interest accumulates.
Every provider will have their own rules, but typically, the maximum amount of cash they will lend you is 30% to 60% of your property value. However, the amount you receive will depend on your age, and if you are older, you could receive more than 60% if you use a lifetime mortgage. However, this is usually only in exceptional circumstances.
Our article on how much can you borrow from equity release will be useful for you to read.
When you take out a lifetime mortgage, the mortgage lender will place a charge on the property title. However, you will remain the legal owner of the property.
The simple answer is yes, you can. However, you must speak to your lender to tell them where you want to move to. As long as they are happy that your new property is suitable to secure the loan against, there should be no issue.
They usually can continue living in the house; however, you must ensure that the mortgage is written in joint names when you take out the mortgage. If not, your partner or spouse may have to sell your home to pay off the loan.
There are typically three types of mortgages that you look at. These are:
You can read and watch a short video explaining how each of these works below.
For an equity release provider to have their plan approved by the Equity Release Council, it has to have a ‘no negative equity guarantee’.
This basically means that when you use a Lifetime Mortgage, you will never owe more than the house is worth.
Click here for more information on the equity release council.
Because you have a negative equity guarantee, it doesn’t matter that when your house is sold, the sale price is less than what is owed.
The financial services provider will not be able to return to your estate and ask for the difference to be made up. However, it also means that no proceeds from the sale of the house will be paid to your estate and family.
If you’re worried about the interest that could be payable, then you can always decide not to ‘roll-up’ the interest and repay it when the home is sold.
Like an interest-only mortgage, you can choose to make regular interest payments throughout the life of the loan.
This, in turn, keeps the outstanding balance as a fixed amount instead of one that increases over the years. Minimising this increase in the loan value might be something that appeals to you, and an advisor can explain the benefits of this.
You can read more about what happens with equity release here.
If you receive government benefits, any means-tested benefits you receive may be impacted now or in the future. You can book a call with an advisor using the calendar below to see how it may impact you.
Typically what happens is that the loan you were given is sold or passed on to a new lender. This means that you will still need to continue paying the original loan on the agreed terms.
They will not be able to change the rules and force you to repay the loan any sooner than was originally agreed.
If you do take out the loan and decide that you want to repay it before either the homeowner dies or moves into long term care, then it is possible that early repayment charges apply. However, it is possible to get mortgages at the outset that allow early repayment.
As is the case with all financial investments, equity release plans have a variety of pros and cons attached to them.
As a whole, there are a number of pros and cons of an equity release plan – but you’ll find a range of products, each with its own individual characteristics.
For this reason, it’s incredibly important to research your options thoroughly and identify where products may differ between providers and even based on your individual position financially and personally.
As this is often such an important decision, it is important that you do your research and make a list of all your equity release pros and cons.
Here is a video that looks at the advantages and disadvantages of an equity release plan.
Here is the original video on the advantages and disadvantages of equity release.
You’ll retain ownership of your property for now – or at least a portion of it. This enables you to stay in your own home indefinitely – and leaves open a possibility that you could retain some equity from your home later. Note that you only continue owning your home with a lifetime mortgage.
You are free to choose how to spend the money released from your property value. For example, you can use it to pay for care, gift cash sums to relatives or make necessary improvements or modifications to your home.
This protects you from paying more than you borrowed should the property value drop significantly.
Some providers also allow you to separately protect a portion of your property’s value to gift as an inheritance. Making partial repayments early may also be possible should your situation change.
A natural consequence of taking out an equity release plan is reduced inheritance – as you’ll no longer be able to leave your property as a gift. However, this may be less of a concern for those considering later-life finance or care funding without much time to spare.
The amount you receive against your property is often offered at a valuation less than its market price, so you could be out of pocket if your circumstances change. You may also decide it is ideal to sell up, although this would mean that you will be unable to stay home.
Enrolment can affect your tax status and entitlement to certain welfare payments and benefits. For this reason, it’s worth obtaining advice to get a clearer picture of how the change will affect you financially.
Most schemes accrue interest – at fixed or variable rates. Thoroughly research providers and interest rates on offer before making a decision.
They can be inflexible once they have been taken out – so if your circumstances are likely to change later down the line, this may not be the ideal thing for you. For example, if you use up funds released and run out of money earlier than expected or have to move into a residential care home, it may be difficult to work around your current solution.
Here is a video with the pros and cons of equity release.
Always weigh up the equity release pros and cons with your own personal situation and prognosis in mind – especially if you plan on using the funds to pay for care.
For complex or particularly unique situations it may be imperative to enlist support from an experienced professional who can guide and advise you based on the information you provide.
As funding for long-term care becomes an increasingly complex issue for individuals and their families, it’s never been more important to weigh up and explore the range of options open to you.
Sometimes the sheer amount of choices feels overwhelming – and when money is tied up or difficult to access this usually adds to the stress and frustration of the situation.
Equity release is becoming an increasingly popular choice for individuals and couples planning for later life – especially those considering future care needs.
It is an attractive option for couples and individuals considering how to fund care in the future or in the short term because it is flexible and requires little disruption or upheaval.
Equity release plans enable the homeowner or homeowners to remain at home, enjoying the same quality of life, without compromising in the short-term.
It provides instant access to money, which you are free to spend however you like.
This is an attractive prospect for individuals needing care who wish to remain at home in the long-term, as it enables them to remain where they are while providing ample funds to pay for care at home and necessary modifications or maintenance.
It may also be useful for couples in the event of one person needing residential care – as one spouse or partner can remain at home whilst the other can enjoy the quality and level of care they require.
If a traditional equity release plan isn’t an option for you, you may consider remortgageing to take out equity from your property. This is an option to look at when looking at paying for care.
If you are looking to remortgage to release equity in your home, then this involves taking out a new, larger mortgage to cover the remaining balance on your property and release a fixed sum for you to use however you wish.
Remortgaging can be complex and risky, and should be conducted under the guidance of a financial professional who can act with your interests at heart.
We often get asked if it is possible to get an equity release mortgage if you are under 55.
However, unfortunately, it’s not possible to apply for it if you are under 55.
Traditionally, they were only an option for individuals over the age of 65 – however, in recent years, policies have become increasingly flexible.
It’s now possible to apply for equity release with selected providers from the age of 55 upwards.
As interest rates rise and fall, equity release mortgages are naturally influenced, and interest rates vary between companies. Therefore, it is worth spending time to find the best equity release deals.
Some mortgages will be based on ‘static’ or ‘fixed’ rates, whilst others are variable and subject to inflation. What you take out depends on your circumstances and what guarantees you need.
When making a decision regarding your suitability for equity release plans, it’s key to investigate the amount of interest you’ll be expected to pay. Browse providers and work out how much you will need to repay once the contract is terminated.
Some options enable low monthly repayments to cover interest accrued, so you will only be liable to pay back the loan itself when the contract comes to an end.
The mortgage interest rate that you will get will typically depend on the amount of loan to value (LTV) you are taking.
The range of equity release mortgage rates that you can get is very wide. That is why we strongly recommend that you speak to a specialist to help you find the most competitive rate.
Here is a list of some of the best equity release companies in the UK. If you speak to them, they should be able to tell you about their best equity release plans. Please note there are other companies that are not listed below, an the one’s listed below might not be right for your circumstances.
Established in 2006, Age Partnership provides tailored advice on accessing tax-free cash from your home through lifetime mortgages or home reversion plans.
Aviva has been providing equity release plans for over 20 years, and offers a range of products, including lifetime mortgages and home reversion plans.
Just have been in the industry since 2004.
They provide both lifetime mortgages and home reversion plans, sometimes with no upfront fees or early repayment charges.
Responsible Life offers a range of options, including interest-only lifetime mortgages and flexible drawdown plans, which are typically tailored to meet your individual needs.
They have over 20 years’ of experience in the industry. Stonehaven provides advice and products to customers looking to release equity from their homes.
Offering a range of financial solutions for retirees, this company helps you unlock money from your property using lifetime mortgages and other products.
Pure Retirement offers flexible retirement options such as drawdown plans, lump sum payments and lifetime mortgages.
Specialising in lifetime mortgages and equity release plans, Hodge Lifetime offers a range of products with no early repayment fees.
There are three main types of products to release equity in the UK.
We have produced some short videos below which explain how each of these schemes works.
You can read more about Lifetime Mortgages here.
Also, here is a video that explains how they work.
You can read more about a Home Reversion Plan here, which is an alternative type of scheme used by older people.
You can watch a video on what they are here.
This is also a popular type of mortgage product that people use.
You can read more about them here.
In this article, we answer 22 important questions that you may have about equity release, including what it is, how it works and what the best interest rate deals are.
Equity Release is not for everyone. In this article we look at the alternative options that you can consider if you need access to money in later life to pay for care, top up your pension etc.
A lifetime mortgage is the most popular type of equity release scheme, as it’s the most flexible and versatile option. The amount you receive depends on your property value.
In recent years equity release has become a very popular option. This article looks at the pros and pitfalls of equity release and what you need to consider before taking it out.
How much you can borrow from equity release varies depending on your age and house value. In this article we look at how much you could borrow from your home.
A drawdown mortgage is a type of equity release scheme, offering greater flexibility and freedom compared with traditional plans. In this article we explain all that you need to know.
An equity release calculator will give you a good indication of what you can borrow from your home. This article explains how the calculator works and also shows you what you can receive.
One of the big concerns that people have about equity release is what happens to their home and borrowings when they die. In this article we explain everything you need to know.
A home reversion plan is primarily suited to individuals over 65 looking for a solution to their finances. This article explains all you need to know.
The adverts for Boon Brokers on this page have been signed off as a Financial Promotion by Boon Brokers Limited, to ensure that they are in compliance with Section 21 of FSMA. Boon Brokers Limited is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
Unlike most equity release advisors, Boon Brokers do not charge any fees! Have a free consultation to see how they can help.
You can speak to Boon Brokers on the number below and discuss your options
0333 567 1607
Use the equity release calculator and see how much money you could receive.
You can book a call back from for an equity release specialist, who can call you when it's conveniant
All equity release advice is provided by Boon Brokers Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
If you take out a product with Boon Brokers, we will receive a fee for introducing you to them. Boon Brokers provides advice for free and without obligation. By contacting Boon Brokers through us, the cost of any equity release product would be the same as if you had contacted them directly.
The fee we receive is used to help keep this site operational and to produce new content.
Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
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