See how we can help

Get started online

Alternatives to equity release

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Oct 23, 2022

Alternatives to equity release to fund your retirement – What are your options?

An equity release plan may be a good option if you are over 50 years old and want to take some equity out of your home without having to move. This is a great way to save money, buy a house you love, or give a lump sum to your family and is another option to think about before looking for a personal loan.

This is a complicated area of finance and not always an easy decision. Still, hopefully, this article will discuss alternatives to equity release and also explain what you should consider before making a decision.

Click the link below to speak with a mortgage advisor to discuss a lifetime mortgage, retirement interest-only mortgage, personal loan and any other mortgages you are looking at.

Get started online


Is equity release a better option?

Yes, it could be however, it all depends on your personal circumstances and reasons to use the equity release in your property to raise funds. Although it is always wise to consider all alternatives to equity release, equity release can a good idea and be the best option in some instances.

You are eligible if you’re at least 55 and your standard construction property is valued at £70,000 or more. These criteria will allow you to avoid lengthy and costly application processes. This is even more true if you choose to draw down.

Equity release can be expensive, especially if you’re not in the minimum age bracket. The monthly repayments for the loan will continue until the last applicant passes away or is placed in long-term care.

The most popular form of equity release, a lifetime mortgage, will allow you to avoid monthly repayments and significantly reduce your inheritance. The monthly interest repayments are compounded and are paid off when the loan is settled.

You could transfer your property ownership to someone else if you select a home conversion scheme.

Equity release is a great way to access your equity and make a little more money in retirement. It is costly to make a mistake but if done properly then equity release is safe and you will have the funds you require.

Click the link below to discuss alternatives to equity release, how to get a cash lump sum and monthly interest payments.

We are expert mortgage brokers

We have access to over 200 lenders in the UK to get you the best rates

Get your Quote


The main alternatives to an equity release product

Before deciding on whether an equity release is suitable for you, you can consider the following:

Only mortgage for retirement, also known as a retirement interest-only mortgage

This retirement interest-only mortgage or RIO mortgage, is commonly known as an equity release mortgage.

An RIO mortgage allows you to borrow a lump amount and then make monthly payments to pay the interest. The interest rate starts at around 2.29 per cent and the capital amount is unchanged regardless of how long the loan lasts.

Interest-only repayments are more affordable than compounded interest and prevent the loan from being repaid. If your property’s value has increased by the time you sell it, you may still be able to leave a healthy inheritance.

Get started online


Equity release via a remortgage

A simple remortgage is often cheaper than an equity release because the rates and the amount of interest and capital you pay over the loan term are lower.

To avoid equity release early repayment fees, it is best to hold off on remortgaging an existing mortgage that has not reached the end of its term. You will need to meet the standard eligibility requirements of your lender before you can either stay with your current provider or remortgage to a new lender.

Some lenders will require you to be employed or put an age limit on the loan. Borrowing into retirement could restrict your options for lenders. Some providers do not have an upper age limit for their mortgages, but they may ask you to provide further proof of income if the loan is used to retire.

You can still benefit from lower interest rates if you find a lender specialising in late-life lending.


This could be the best decision if you are ready to sell your primary residence, pay off your mortgage, and want to move to a smaller property in a more affordable area. The proceeds from the sale are tax-free and can be used to fund any purpose. Moving to a smaller home can reduce your council tax and household bills.

Sometimes, leaving your home and moving far away from friends can be challenging. Even if your home is ready to be sold, it may take some time, and you might not immediately have the cash you need.

Also, you will need to estimate the costs of moving house, such as legal and estate agent fees. These expenses could affect the amount of the sale. If you stay in your new place for a long time, these costs may be offset by the home’s value increasing.

Secured loans

Secured loans can be applied for faster than a mortgage. A second fee is used to secure the loan against your property. The rates are generally lower than those for an unsecured loan but usually higher than for a mortgage.

A ten-year secured loan could be less expensive than a mortgage extended over a longer period and through retirement. A secured loan might be the best option for smaller amounts.

Providers impose the same affordability and age restrictions on secured loans as standard mortgages. Although there is no maximum age to apply for a secured loan, lenders must lend responsibly, and each has its own eligibility criteria.

While many lenders have an age limit of 65, others do not and will evaluate each application on its merits.

Personal loans

Your property does not secure personal loans, so the rates will be higher. An unsecured loan’s average rate is 9.4%. You will typically need to be employed and pass an affordability test, regardless of whether you have equity in your home.

Most mainstream lenders typically limit personal loans to £25,000. Rates for loans from other lenders can be higher.

Stay with a lodger

Rent a Room Scheme by the government allows you to rent out furnished rooms in your home and makeup to £7,500 per year tax-free.

Although this arrangement isn’t for everyone, if you have the space and are open to taking in a lodger, this can be a very lucrative arrangement that doesn’t require you to dip into your savings or equity.

It’s worth trying out Airbnb or other similar platforms before you commit to a long-term commitment.

Refinance your investment property

You could also look at other properties to raise funds in various ways.

  • It can be sold
  • It can be rented
  • You can borrow against your rental property, not your primary residence.

Which one do you prefer?

This depends on your personal circumstances and preferences. Before making a decision if equity release is a good idea, you must talk to a specialist advisor.

Get started online


The most significant impact on your daily life will be from downsizing or hiring a lodger. Equity release and RIO mortgages will have the most impact on the inheritance you can leave behind.

Your decision will also be influenced by the money you need, how you will use it, and how fast you need it. The quickest option may be better if you have to get cash quickly to invest in an opportunity.

You usually have enough time to plan your timeline and consider all possible outcomes when borrowing money for home improvements or a dream vacation.

You can’t take out equity-release products without consulting a qualified advisor. You should not rush to take out an equity-release effect without taking the time to consider it. You will not be able to advise on all options, and you should do your research or talk to a mortgage broker specialising in the whole market by clicking the link below.

Get started online


Match with a specialist in later-life lending

It is essential to get it right the first time when borrowing money in later life. You may not be able to recover from an error financially.

Our brokers have full market access and are trained to advise on equity release products. The broker matching service will connect you with a specialist in later-life lending. Before exploring all borrowing options, this specialist will assess your financial situation and discuss your future plans. This will help you make an informed decision.

Click the link below to begin your equity release application.

Get started online


Equity release alternatives FAQ’s

Is there an equity release option for a life-long mortgage?

Yes, a home conversion plan is an alternative. This is where you sell all or part of your home to receive a lump sum of cash, regular income, or a combination of both. Experts do not recommend this as it is risky, expensive and costly.

Is a credit card a viable alternative?

Credit cards can be used for short-term borrowing. You will have to pay the interest and then repay the card. You should not use your credit card for large purchases, especially if you are approaching retirement or anticipate a decrease in income.

To begin with, use this equity release calculator or simply click the link below to start your application online.

Get started online