Equity Release Calculator 2026/27

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Equity Release & Lifetime Mortgage Calculator

✓ Verified for 2026/27

Lifetime Mortgage Details

£
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£
Normally up to 20% to 50% of property value depending on age.
%
Interest compounds annually and rolls up.
years
%
Future Property Value
£0
after 15 years
Compounded Loan Balance
£0
principal + rolled-up interest
Total Interest Accrued
£0
accumulated cost
Remaining Home Equity
£0
your remaining share

Equity & Debt Comparison

Initial Property Value £0
Initial Cash Released £0
Compounded Loan Balance £0
Remaining Equity £0
Future Property Value £0
Loan Balance 0%
Remaining Equity 0%

Year-by-Year Projection

Shows how the loan balance compounds while the property value grows.
YearProperty ValueLoan BalanceAccum. InterestRemaining Equity
🛡️ No Negative Equity Guarantee: Reputable lifetime mortgages in the UK (approved by the Equity Release Council) include a guarantee ensuring you or your estate will never owe more than the sale value of the property, even if the loan grows larger than the property's value.
🛡️
Verified for Accuracy (2026/27 Tax Year)
Fact-checked and audited by David Vance, CTA FCA, Chartered Tax Advisor & Accountant. Verified against official HMRC rules.
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How We Calculated This

  1. Input variables: Enter the relevant amounts, rates, or percentages in the form.
  2. Real-time breakdown: The calculator applies HMRC rules and thresholds for the 2026/27 tax year to process the values.
  3. Display outputs: The visual graphs, donut charts, and tables are compiled dynamically to show your net take-home and deductions.

Real-World Examples

Standard Scenario

A basic calculation applying standard UK tax bands and allowances.

Calculation runs based on standard HMRC rules.
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With Pension or Deductions

Factoring in a percentage of salary sacrifice or pension contributions.

Deductions are calculated and adjusted accordingly.
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Frequently Asked Questions

How does equity release work and what are the main types?

Equity release allows UK homeowners aged 55 and over to unlock tax-free capital from the value of their property without having to sell their home or move out. The unlocked cash can be taken as a single lump sum or as a series of smaller regular drawdowns. There are two primary types of equity release:

  • Lifetime Mortgage (Most Common): You secure a loan against your home while retaining full ownership. You do not make any monthly repayments. Instead, the interest is rolled up and added to the loan balance monthly. The total loan plus the accumulated compounding interest is repaid from the sale of the property when you pass away or move permanently into long-term care.
  • Home Reversion Plan: You sell all or a portion of your property to a provider in exchange for a lump sum or regular payments, and a lease that lets you live in the home rent-free for life. When the home is eventually sold, the provider receives their percentage share of the sale value.

What are the risks and costs of a Lifetime Mortgage?

The main risk of a Lifetime Mortgage is the power of compounding interest. Because you do not make monthly payments, interest is added to interest. Over a 15-year period, a rolled-up interest rate can easily double the size of your original debt, significantly reducing the inheritance you leave to your family. To protect borrowers, ensure your equity release provider is a member of the Equity Release Council (ERC), which guarantees a ‘no negative equity guarantee’ (ensuring your estate will never owe more than the property’s final sale value) and the right to remain in your home for life. Equity release can also affect your eligibility for means-tested state benefits, so professional independent financial advice is mandatory before proceeding.

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