Can I Sell My House if I Have Equity Release?

Equity release has become a popular financial option for homeowners over 55 who want to unlock the value of their home without having to relocate. But what happens when your circumstances change and you want or need to move? One of the most common questions we hear is, “Can I sell my house if I have equity release?” 

The answer is yes, you can. However, there are some key conditions, costs, and potential complications to be aware of. In this guide, we will go over how it works, your options, and how to make the process as simple as possible, especially if you want to sell quickly.

What is equity release?

Equity release allows homeowners aged 55 and over to access the equity in their property. This money can be released in one lump sum, several instalments, or a combination of the two.

The two main types of equity release are:

• Lifetime mortgage – This is the most common type. You retain full ownership of your home, but interest accumulates over time, and the loan is typically repaid when you die or enter long-term care.
• Home reversion plan – You sell a portion or all of your property to a provider in exchange for a lump sum or regular payments while retaining the right to live there rent-free.

Most homeowners choose lifetime mortgages, as they still retain ownership of the home. With home reversion plans, a portion of the house is sold to a home reversion specialist. This means you’ll have less of a percentage to pass on when you move out or pass away.

Can I sell my house after equity release?

Yes, you can sell your home even if you have an equity release plan. When you sell your property, you must repay the equity release loan in full.

If you have a portable plan, you may be able to transfer your equity release to another property, but this is subject to strict guidelines.

Let us take a closer look at both scenarios.

Option 1: Transferring your equity release to a new property

Many equity release providers provide ‘portable’ plans, which allow you to transfer your plan to a new property. This is a popular option for those who want to downsize or relocate to be closer to family while keeping their equity release agreement in place.

However, the new property must meet your provider’s requirements. This typically includes:

• The new property being of equal or higher value
• The property is in good condition and situated in an acceptable area
• The house is of standard construction (some flats, retirement homes, or leasehold properties may be excluded)

If your new property does not meet the lender’s requirements, transferral may be denied, and you will be required to repay the entire amount owed under your current equity release agreement.

Option 2: Repaying the loan and selling the house

If transferring is not an option or you prefer a clean break, you can repay the loan in full when you sell your home. This repayment includes:

• The original amount you borrowed
• Any accrued interest (usually compounded annually)
• Any early repayment fees (if applicable)

Your agreement determines whether or not you will incur early repayment charges. Some lenders waive the fee if you are selling due to a significant life change, such as entering long-term care or the death of a partner. Others may apply a percentage-based penalty.

Before proceeding, ensure you understand your agreement and request a complete redemption statement.

What are the costs of selling with equity release?

Here are the key financial factors to consider when selling your home with equity release.

• The redemption amount includes both the loan and the rolled-up interest.
• Early repayment fees can range from 5% to 25%, depending on the plan’s terms and duration.
• Legal fees: You will need a solicitor to handle the sale and communicate with your equity release provider.
• Unless you sell privately or to a property buying company, you will incur valuation and estate agent fees.

Selling to a cash buyer can help homeowners with equity release avoid red tape and save money.

Can I sell quickly if I have equity release?

Selling a property on the open market can be time-consuming, especially if equity is involved. There is additional paperwork, lender approvals, and solicitors who may be unfamiliar with equity release guidelines, making delays common.

If you want to sell your home quickly, whether to free up funds, relocate, or relieve financial stress, using a specialist cash house buyer can be a wise decision.

Pros and cons of selling with equity release

Pros:

• You are not locked in; you can sell and move even after releasing equity.
• Repaying the loan eliminates future obligations; no interest is accrued once the loan is paid in full.
• You regain control of your finances, which is especially useful if your circumstances have changed.

Cons:

• Early repayment charges may apply, which can reduce the proceeds of your sale.
• Not all properties are eligible for transfer, limiting your options if you want to move.
• Equity release reduces the amount of equity you walk away with. The longer the plan has been in place, the more interest may have accrued.

Should you sell with equity release?

Equity release doesn’t have to tie you down. Whether you want to move closer to family, downsize, or simply cash in on your investment, selling is an option – and in some cases, it may be the best option for your financial well-being.

But it is critical to plan ahead. Obtain a redemption statement from your lender, understand your contract, and consult with professionals who can walk you through the process.

Looking to sell quickly?

Sell House Fast has helped hundreds of homeowners sell quickly, even with equity release in place. Here’s how we can help:

• We buy houses, regardless of age, condition, or financial situation.
• We handle the paperwork, including communicating with your equity release provider and solicitor.
• There are no estate agents, no fees, and no hidden charges or commissions.
• We offer flexible timescales so you can complete in a timeframe that works for you.
• We are discreet and confidential – we know how personal selling a home can be.

Selling your home doesn’t have to be complicated. With us, everything is quick, fair, and stress-free. If you’re thinking of selling your house and have an equity release plan in place, don’t wait. Contact us today for a no-obligation cash offer.