Later life and equity release mortgages

Borrowing in retirement or releasing equity from your home involves products with different risks from a standard mortgage. The rules require specialist advice — here is what you need to know before you start.

Last checked 13 September 2026. Editor: Kris · editorial standards

Seven sections. Each anchored to a first-party source, checked 13 September 2026.

1. Three product categories

Three main product types serve borrowers in later life:

• Retirement interest-only (RIO) mortgage: you pay the interest each month; the capital is repaid when you die, move into care, or sell. Regulated by the FCA under the standard mortgage regime.
• Lifetime mortgage: a loan secured against your home. No monthly payments; interest rolls up into the loan balance or is paid voluntarily. The loan is repaid from the property sale when you die or go into long-term care. The dominant form of equity release.
• Home reversion plan: you sell a share (or all) of your property to a provider in exchange for a lump sum or income and the right to live there rent-free. Less common. When the property is sold, the provider takes its percentage of the sale price, regardless of how that price has moved.

2. FCA authorisation and specialist qualifications

Equity release (lifetime mortgages and home reversion) is a separate regulated activity from arranging standard mortgages. A broker must hold the appropriate FCA permissions to advise on equity release. Many mortgage brokers are not authorised for equity release; you should not accept equity release advice from a broker whose FCA registration doesn't cover it. Check the firm's permissions on the Financial Services Register before you proceed (FCA Handbook, MCOB 8).

3. Equity Release Council standards

The Equity Release Council (ERC) is the industry trade body for equity release providers and advisers. ERC members must meet a set of product standards including: a no-negative-equity guarantee (you will never owe more than your home is worth); the right to make penalty-free partial repayments on many products; the right to remain in your home for life or until you move into care; and a fixed or capped interest rate on lifetime mortgages (Equity Release Council). Membership is voluntary. Check whether the provider and adviser you are considering are ERC members, and if not, ask specifically which of these protections their product provides.

4. Compound interest and its effect on the estate

On a lifetime mortgage where interest rolls up, the balance grows exponentially. On a loan of £80,000 at a fixed rate of 5%, the balance after 20 years without any voluntary payments would be around £212,000. Whether this matters depends on how much equity remains in the property, whether inheritance is a priority, and what the alternative uses of the money are. Run the compound interest through the lender's illustration before you sign; do not rely on the round-number loan amount.

5. Impact on means-tested benefits

A lump sum from equity release becomes savings in your hands on the day you receive it. If you receive means-tested benefits (Pension Credit, Council Tax Reduction, Housing Benefit), a capital payment above the relevant threshold can reduce or remove those benefits. Take separate welfare benefits advice before proceeding; the mortgage adviser is not required to provide it. GOV.UK sets out the rules on savings and benefits: Pension Credit eligibility.

6. Involving your family

The FCA's guidance encourages equity release advisers to discuss whether the customer would like a family member or trusted person involved in the advice meeting. This is not a rule — you do not have to bring anyone — but for a decision that affects inheritance and the home you may live in for the rest of your life, independent input from family or from a solicitor is valuable. The ERC requires member advisers to recommend that customers seek independent legal advice from a solicitor before completing.

7. Questions to ask the adviser

• Are you authorised to advise on equity release, and are you a member of the Equity Release Council?
• Have you looked at a retirement interest-only mortgage as well as equity release? What is the difference in total cost over a 15-year and 20-year horizon?
• If I make voluntary repayments, what are the limits and are there charges?
• Does this product carry the no-negative-equity guarantee?
• How will this affect any means-tested benefits I receive?
• Will you put the recommendation in writing and give me a personal illustration I can take away?

Brokers whose website mentions later life & equity release

607 firms in our directory mention later life & equity release on their own website. That's what they say about themselves, not an assessment by us, so check that a firm handles your situation and look it up on the FCA Register before taking advice.

More guides

• How to choose a mortgage broker
• Mortgage declined
• Cifas markers and mortgages
• Mortgages with bad credit
• Mortgages for the self-employed
• First-time buyer mortgages
• Buy-to-let mortgages
• Remortgage guide
• Contractor mortgages
• Agreement in Principle
• Credit score and mortgages
• Mortgage broker fees
• Divorce and mortgages
• Gifted deposit
• Should you use the estate agent's recommended broker?
• Documents for a mortgage application
• What happens at a mortgage fact-find
• Joint mortgages
• NHS staff mortgages
• Buying at auction: bridging and mortgage options
• Expat mortgages
• New build mortgages
• Shared ownership mortgages
• Green and eco mortgages
• Second charge mortgages
• Holiday let mortgages
• Help to Buy: what existing borrowers need to know
• Offset mortgages

General information, not advice. Mortgage Brokers List is a directory and a set of free tools. Only an FCA-authorised adviser can recommend a mortgage for your circumstances. See our editorial standards.