Equity Release Examples & Case Studies

How Can Equity Release Help You?

If you’re considering equity release, it can be helpful to see real-world examples of how others have used it. People release equity for many reasons—to supplement retirement income, fund home improvements, help family members, or simply enjoy life more comfortably.

This guide explains the different types of equity release and provides six practical examples of how people have used it. These case studies should help you decide whether equity release might be the right option for you.

What is Equity Release?

Equity release allows homeowners aged 55 or over to unlock money from their property while continuing to live in it.

With lifetime mortgages, the most popular option, there are no monthly repayments unless you choose to pay the interest. Instead, the loan plus interest is repaid when you pass away or move into long-term care, usually from the sale of your home. Any remaining proceeds go to your estate or beneficiaries.

With home reversion plans, you sell a portion of your home in exchange for a lump sum or regular income, while still having the right to live there rent-free.

Equity Release Options:

• Lump Sum Lifetime Mortgage – Take a one-time payment of tax-free cash.
• Drawdown Lifetime Mortgage – Release an initial sum and withdraw more as needed over time.
• Interest-Only Lifetime Mortgage – Make monthly interest payments to reduce the total amount owed.
• Home Reversion Plan – Sell all or part of your property while continuing to live in it.

Now, let’s look at some real-world equity release examples.

Lump Sum Equity Release Examples

Example 1 – Paying Off a Mortgage & Renovating the Home

Paul and Susan, both 67

• Home value: £325,000
• Equity released: £85,000

Paul and Susan recently retired and still have £30,000 left on their mortgage. With their pension income, keeping up mortgage payments was becoming a strain. They also wanted to renovate their home and build a new conservatory to enjoy their retirement fully.

After speaking to an adviser, they decided to release £85,000 with a lump sum lifetime mortgage. This allowed them to:

• Pay off their mortgage, freeing up monthly income
• Fund a new conservatory and upgrade their kitchen

Now, they can enjoy their retirement stress-free without having to downsize.

Example 2 – Helping a Daughter Buy Her First Home

Margaret, 72

• Home value: £400,000
• Equity released: £60,000

Margaret’s daughter, Lisa, was struggling to save for a deposit on her first home. With property prices rising, she was finding it difficult to get onto the housing ladder.

Margaret, who owns her home outright, decided to release £60,000 to help Lisa put down a deposit. Lisa understood this would reduce her future inheritance, but she preferred having financial support now.

This decision meant Lisa could buy a home years sooner, and Margaret was happy knowing she had helped her daughter secure her future.

Drawdown Equity Release Examples

Example 3 – Topping Up Retirement Income for Holidays

John and Carol, both 74

• Home value: £290,000
• Initial drawdown: £10,000
• Reserve facility: £70,000

John and Carol live comfortably on their pension annuity but miss the travel experiences they enjoyed when they were younger. They didn’t want to take a large lump sum all at once, so they opted for a drawdown lifetime mortgage.

• They took an initial £10,000 to go on a long-awaited Mediterranean cruise
• They set aside £70,000 in a reserve facility to draw from in the future

With this plan, interest only accrues on money they withdraw, helping to protect their children’s inheritance.

Example 4 – Spreading Home Improvements Over Time

Dorothy, 79

• Home value: £350,000
• Initial drawdown: £15,000
• Reserve facility: £50,000

Dorothy has lived in her home for 50 years and wants to gradually update it. She needs:

• A new roof due to leaks
• A modernised kitchen and bathroom
• A safer driveway

Instead of taking a large lump sum, Dorothy opted for a drawdown plan. She took £15,000 upfront for urgent repairs and left £50,000 in reserve to use as needed. This keeps her interest costs lower than taking a larger lump sum at once.

Interest-Only Equity Release Examples

Example 5 – Buying a New Car & Caravan

David and Patricia, both 71

• Home value: £375,000
• Equity released: £40,000
• Monthly interest payments: £120

David and Patricia love caravanning across the UK, but their car and caravan are old and expensive to maintain. They wanted to buy a newer, more reliable setup but didn’t want to take on a traditional loan with high repayments.

They chose an interest-only lifetime mortgage, releasing £40,000. They now make small monthly interest payments of £120, preventing the loan from growing over time. This ensures they can leave more inheritance for their children.

Example 6 – Clearing Debt & Reducing Financial Stress

Michael, 63

• Home value: £275,000
• Equity released: £50,000
• Monthly interest payments: £150

Michael was struggling with credit card and loan debt, with high monthly repayments. After seeking financial advice, he decided an interest-only lifetime mortgage was the best way to regain control of his finances.

• He used £50,000 to clear his debts, freeing up his income
• He chose to pay the monthly interest to prevent the loan from growing
• If his financial situation changes, he has the option to stop making payments, and the loan will switch to a standard lifetime mortgage

Michael now has peace of mind knowing his finances are under control without the burden of monthly loan repayments.

Important Considerations

Equity release is regulated by the Financial Conduct Authority (FCA), ensuring consumer protection. If you choose a plan from a member of the Equity Release Council, you’ll also benefit from:

• No negative equity guarantee – You’ll never owe more than your home’s value.
• The right to stay in your home for life.
• The option to move home without penalty.
• The ability to make partial repayments.
• Fixed or capped interest rates for life.

Potential Drawbacks

Equity release isn’t right for everyone. Some key considerations include:

• It reduces the value of your estate, affecting inheritance.
• Interest can compound, increasing the total owed over time.
• It may impact eligibility for means-tested benefits.
• Early repayment charges may apply if you want to repay the loan early.

Alternatives to Equity Release

If equity release isn’t suitable, you might consider:

• Downsizing to a smaller property
• A Retirement Interest-Only (RIO) mortgage
• Financial support from family
• Government grants or benefits

Could Equity Release Work for You?

If you’re considering equity release, speaking with a qualified adviser can help you explore your options and ensure it’s the right decision for your financial situation.