Information, not adviceThis page explains how equity release works in general. It is not a recommendation. Equity release is not right for everyone: an adviser will look at your circumstances, your options and the costs before recommending anything, and you will need independent legal advice before any plan completes.
How a home reversion plan works
You sell a share of your home
You sell a percentage of your home, or all of it, to a home reversion provider.
You are paid less than market value
You receive a lump sum or regular payments, usually between 20% and 60% of the market value of the share you sell.
You keep living there
You have a lifetime lease to stay in your home. You must keep it in good repair and insured.
The home is sold later
When the last homeowner dies or moves into long-term care, the home is sold and the provider receives its share of the sale price.
How much you would receive
You will usually get between 20% and 60% of the market value of your home, or of the part you sell. You get less than full value because the provider has to wait, often for many years, before it can sell. The older you are when the plan starts, the higher the percentage tends to be, and some providers take your health into account.
| Example |
|---|
| Home value | £300,000 |
|---|
| Share sold | 50%, worth £150,000 at market value |
|---|
| You might be offered | £30,000 to £90,000 |
|---|
| Provider receives when the home is sold | 50% of the sale price, including any rise in value |
|---|
Illustration only, using the 20% to 60% range published by MoneyHelper. Offers vary by provider.
Things to think aboutEquity release will involve a home reversion plan or a lifetime mortgage, which is secured against your property and will reduce the value of your estate and impact funding long-term care. Equity release requires paying off any existing mortgage. Any money released, plus accrued interest, would be repaid upon death, or moving into long-term care. Releasing equity may affect your entitlement to means-tested benefits.
Home reversion or lifetime mortgage?
| Home reversion plan | Lifetime mortgage |
|---|
| What it is | You sell all or part of your home | A loan secured on your home |
|---|
| Who owns the home | The provider owns the share it bought | You keep full ownership |
|---|
| Interest | None, because it is not a loan | Charged, and usually added to the loan |
|---|
| What you receive | Usually 20% to 60% of the value of the share you sell | A percentage of the home’s value that rises with age (see the calculator) |
|---|
| Minimum age | Usually 60 or 65 | Usually 55 |
|---|
| Rises in house prices | The provider gets its share of any rise | The rise stays with you or your estate, less what is owed |
|---|
| How common | Rare | More than 99% of new plans |
|---|
Read more about lifetime mortgages.
Things to consider
Ending the plan early
You would usually have to buy back the share you sold at full market value, which could be much more than you were paid.
If you die soon after
The provider still receives its full share. Some providers offer protection against this; ask an adviser.
Your estate
The share you sell will not be part of your estate, so there will be less to leave to your family.
Benefits
A lump sum or regular payments could affect means-tested benefits.
Moving home
Check what happens if you want to move, and whether the plan can move with you.
Upkeep
You remain responsible for repairs, maintenance and insurance under your lease.
Questions
Do I pay rent?
Usually you pay a nominal rent or none at all under a lifetime lease. Check the terms of the plan.
Can I keep a share of my home?
Yes. Many people sell only part of their home, so they keep a percentage that is theirs when the home is sold.
Are home reversion plans regulated?
Yes. They are regulated by the Financial Conduct Authority, and advice is required before you take one out.
Is a home reversion plan better than a lifetime mortgage?
Neither is right for everyone. Which, if either, suits you depends on your age, your health, what you need the money for and what you want to leave. That is what an adviser will look at with you.
Sources
- 20% to 60% of market value, minimum ages, buying back the share and the lifetime lease: MoneyHelper, “Home reversion” and “Using a home reversion plan to pay for your care”.
- Lifetime mortgages make up more than 99% of the equity release market: Equity Release Council market data, 2026.
- Regulation of home reversion plans: Financial Conduct Authority.
Figures are checked when the page is updated and can change. Your own figures will come from the lender and your adviser.