Can You Move House After Taking Equity Release? | February 2024

Can You Move House After Taking Equity Release?

Deciding to take out an equity release can be a significant financial decision that offers you the benefit of accessing the cash tied up in your home without having to move. However, life is unpredictable, and circumstances can change, leading you to consider moving house after taking equity release. It's important to understand whether this is possible and what implications it may have on your financial situation.

In this article you will learn:

  • The importance of understanding equity release flexibility
  • How equity release affects your ability to move home
  • The process involved in transferring an equity release plan to a new property
  • The conditions and implications of moving with an equity release scheme
  • Steps to consider if you're thinking about moving house after releasing equity

Can You Move House After Taking Equity Release?

When you release equity from your home, it's natural to wonder if you can still move house should your circumstances change. The answer is yes, but there are certain factors to consider. Equity release plans, including lifetime mortgages and home reversion plans, usually have clauses that allow for moving to a new property. However, the new property must meet the criteria set by the equity release provider, and there may be financial implications, such as adjustment of the equity release loan or an early repayment charge, that need to be factored into your decision.

Equity Release Schemes and Portability

What is Equity Release Portability?

Equity release portability is a feature of equity release products that allows you to transfer your equity release plan to a new property without incurring penalties, provided certain conditions are met. Portability is an important consideration for those looking to move house after taking out an equity release scheme because it can offer the flexibility needed to adapt to life's changes.

Types of Equity Release Plans

There are mainly two types of equity release plans available in the UK: lifetime mortgages and home reversion plans. A lifetime mortgage is a loan secured against your home, while a home reversion plan involves selling a part or all of your property to a reversion company. Both types of equity release can offer portability options.

Conditions for Portability

Portability conditions vary between different equity release products and providers. The Equity Release Council sets standards that most reputable providers follow. These may include the new property being of a certain value, located in an acceptable area, or meeting specific construction standards. It's essential to check with your equity release adviser and read the terms of your specific plan.

Moving Home with Equity Release

Step 1: Notify Your Lender

If you're considering moving house after taking out an equity release plan, the first step is to inform your lender of your intentions. They will outline the process and any requirements you need to meet. This could include a new property assessment to ensure it's suitable security for the equity release mortgage.

Step 2: Property Assessment

Once you've notified your lender, a property assessment will be necessary to determine whether your new home meets the lender's criteria. This assessment will consider factors such as the property's market value, location, and condition. If the property is acceptable, you can proceed with the next steps.

Step 3: Approval and Valuation

The lender will need to approve the move and may require a professional valuation of the new property. The valuation ensures that the property is worth enough to secure the equity release loan. If the new property is of lesser value, this could affect the interest rate or require a repayment of some of the released equity.

Step 4: Adjusting the Equity Release Plan

If the new property is of a different value than your current home, your equity release plan may need adjusting. This might involve changing the loan amount, which could lead to an early repayment charge. It's important to use an equity release calculator to understand the financial impact.

Legal advice is crucial when moving house with an equity release scheme. You'll need to work with a solicitor regulated by the Solicitors Regulation Authority to handle the legal transfer and ensure compliance with all requirements. There may also be fees associated with transferring the equity release plan to a new property.

Factors Affecting Your Ability to Move

Age and Health Considerations

Your age and health can impact your ability to move with an equity release plan. Some lenders have age restrictions or may adjust terms based on health conditions. It's important to discuss these factors with your equity release adviser before making any decisions.

New Property Criteria

The new property will need to meet specific criteria set by the equity release provider. This could include the type of property, its construction, and its location. Properties with non-standard construction or that are located outside of the provider's service area may not be acceptable.

Financial Implications

Moving house after taking equity release can have financial implications. These may include changes to the interest rate, monthly repayment amounts if you have a regular payment plan, or an early repayment charge. You should also consider the potential for negative equity and ensure your plan includes a negative equity guarantee.

Alternatives to Moving House

Home Improvements and Adaptations

Before deciding to move, consider alternatives such as making home improvements or adaptations to your current property. This can often be a more cost-effective solution and can be funded by releasing equity.

Renting Out Space

Another alternative to moving is renting out space in your current home. This can provide additional income to supplement your retirement funds and may allow you to stay in your home longer.

Tips for a Smooth Transition

Professional Advice and Support

Seeking professional advice from equity release advisers, financial advisers, and legal experts can help ensure a smooth transition if you decide to move. They can provide guidance on the best course of action based on your personal circumstances.

Planning Ahead for Moving

If moving house is in your future plans, it's wise to consider the impact on your equity release agreement. Planning ahead can help minimise any financial surprises and ensure you're prepared for the process.

Keeping Records and Documentation

Maintaining thorough records and documentation of your equity release plan and any conversations with your lender or advisers is important. This paperwork will be valuable if you decide to move and need to reference the terms of your original agreement.

By understanding the ins and outs of moving house after taking equity release, you're better equipped to make informed decisions about your property and finances as you navigate through retirement.

Advantages and Disadvantages of Moving House After Equity Release

When considering equity release, one of the questions that often arises is the possibility of moving house after the plan is in place. It's a decision that can have various implications for homeowners. In the following sections, we will explore some of the advantages and disadvantages associated with moving house after taking equity release.

Advantages of Moving House After Equity Release

Moving house after taking out an equity release product can come with several benefits. Below we will look at seven key advantages.

1) Flexibility to Downsize

  • Downsizing to a smaller property can reduce living expenses and maintenance costs, allowing you to retain more of the released equity for other uses.
  • A smaller home can also be more energy-efficient, potentially saving you money on utility bills and contributing to a more sustainable lifestyle.

2) Access to a More Suitable Property

  • As your needs change, you may require a property that better suits your current lifestyle, such as a bungalow or a house with fewer stairs.
  • A new home can offer features that cater to age-related needs, like accessibility adaptations, which may not be feasible in your current property.

3) Releasing Additional Equity

  • If the property value of your new home is higher and you still meet the criteria, you may be able to release additional equity.
  • Working with equity release advisers, you can evaluate your options using an equity release calculator to see if further funds can be accessed.

4) No Negative Equity Guarantee

  • Many equity release products come with a no negative equity guarantee, ensuring you never owe more than the value of your home, even if you move.
  • This guarantee, upheld by members of the Equity Release Council, offers peace of mind when moving to a potentially cheaper property.

5) Potential for Lower Interest Rates

  • If market conditions are favourable, moving to a new property could secure you an equity release product with a lower interest rate.
  • Lower interest rates can result in less debt accumulating over time, leaving more inheritance for your beneficiaries.

6) Avoidance of Early Repayment Charges

  • Some equity release plans include downsizing protection, allowing you to move to a smaller property without incurring early repayment charges.
  • This feature can make it financially viable to move house without the worry of large penalties reducing your equity.

7) Maintaining Inheritance Aspirations

  • By choosing a property that is more affordable, you may be able to preserve more of your estate for inheritance.
  • Even with an existing mortgage, moving to a less expensive home can help ensure you have assets left to pass on to loved ones.

Disadvantages of Moving House After Equity Release

However, there are also several downsides to moving house after taking an equity release which should be considered carefully.

1) Costs of Moving

  • Moving house can incur significant costs, including stamp duty, solicitor fees, and moving expenses, which can eat into the equity you have released.
  • The overall cost of relocating should be factored into your decision, as it may negate some of the financial benefits of equity release.

2) Eligibility of New Property

  • Not all properties will be eligible for an equity release scheme, and finding a suitable alternative property that meets the lender's criteria can be challenging.
  • Factors such as property type, construction, and location are all considered and may limit your options for moving.

3) Changes to Loan-to-Value Ratio

  • If you move to a property of lower value, you may have to repay part of the equity release loan to maintain an acceptable loan-to-value ratio.
  • This repayment could reduce the amount of cash available to you and affect your financial planning.

4) Complexity in Transferring the Plan

  • The process of transferring an equity release plan to a new property can be complex and requires careful handling to ensure all conditions are met.
  • You may require the services of an equity release solicitor and financial advice, which adds to the time and cost involved.

5) Impact on State Benefits and Tax

  • Releasing equity can affect your eligibility for certain means-tested state benefits and may have implications for inheritance tax.
  • It's important to seek financial advice to understand how moving and releasing further equity could affect your financial situation.

6) Emotional and Physical Stress

  • Moving house is often cited as one of life's most stressful events, with significant emotional and physical demands, especially for older individuals.
  • The upheaval of leaving a long-term home and community can have a profound impact on your wellbeing and should not be underestimated.

7) Risk of Higher Interest Rates

  • If interest rates have risen since your original equity release, moving could mean taking out a new plan at a higher rate, increasing the amount of interest that accrues.
  • This increased interest can quickly erode your remaining equity, leaving less for future needs or inheritance.

Selecting the Right Type of Equity Release

The type of equity release you choose can greatly impact your ability to move house in the future. Lifetime mortgages and home reversion plans are the two main types available, each with distinct features and conditions. The Financial Conduct Authority regulates these products, ensuring they meet strict standards for consumer protection. It's vital to compare different equity release mortgages using tools like equity release calculators to understand potential costs and features.

Before committing to an equity release, consider how it aligns with your long-term housing goals. For instance, if you foresee a need to move into retirement homes or downsize, selecting a plan with flexible moving options is essential. Age Partnership and other equity release advisers can provide tailored advice based on your circumstances, helping you navigate the various products on the market.

When evaluating the type of equity release, factor in the implications of compound interest on your loan amount. This interest can accumulate over time, affecting the equity left in your home and potentially the property value of a second home you wish to purchase. Always seek financial advice to understand the long-term impact of the equity release interest rates on your financial situation and moving options.

Understanding Equity Release Costs

The costs associated with equity release can influence your financial ability to move house. Equity release cost includes setup fees, legal advice, and any potential early repayment charges, all of which can add up. It's crucial to read equity release faqs and guidance from the Equity Release Council to gain a full understanding of these costs.

If considering moving to a second home, remember that equity release mortgages may come with higher interest rates compared to traditional mortgages. This can result in higher compound interest, reducing the amount of equity you can access over time. Consulting with an equity release adviser can help you assess the financial implications of these costs in relation to moving.

Equity release costs don't just affect your current finances; they also have implications for your estate and any inheritance you wish to leave. Inheritance tax considerations and the potential for a reduced estate value due to equity release debts should be carefully weighed. Plan accordingly with the help of financial advisers to ensure your move and equity release align with your future plans and the financial wellbeing of your beneficiaries.

Equity Release and Retirement Planning

Incorporating equity release into your retirement planning requires careful consideration of how it affects your living arrangements. Equity release mortgages can provide a source of retirement interest to fund your lifestyle or care needs, but they also limit the equity available for future moves. It's important to look at the long-term picture and decide if staying in your current home or moving to a retirement home is more beneficial.

When planning retirement, many people consider the option of purchasing a second home as a retirement retreat or investment. However, if you have an existing equity release loan on your primary residence, acquiring a second property can be complicated. Ensure you consult with an equity release adviser to understand how your current financial arrangements may affect future property purchases.

For retirees looking to release equity while maintaining the option to move, it's essential to select the right equity release product. Some plans include features like downsizing protection or the ability to port your mortgage to a new property. These options can offer the flexibility needed for a smooth transition to a new home or retirement community in the future.

A Case Study on Moving House After Equity Release

Here is a case study to help illustrate the real-life application of the question 'Can you move house after taking equity release?' This example will provide insight and may resonate with those considering how equity release can affect their future housing options. It's designed to represent a situation that could be familiar to many, providing a practical perspective on managing property and finances in later life.

John and Margaret, a retired couple living in Surrey, decided to release equity from their home to supplement their retirement income. They chose a lifetime mortgage, which allowed them to stay in their family home while accessing the funds they needed for living expenses. Five years into their plan, they decided they wanted to move closer to their children and grandchildren, who lived in Devon.

After consulting their equity release adviser, they learned that their equity release plan was portable, which meant they could transfer it to a new property. However, they had to ensure the new house met the criteria of their equity release provider, which was listed on the financial services register. They found a suitable bungalow within the acceptable criteria and began the process of moving.

The case study of John and Margaret shows that moving house after taking equity release can be a viable option if the necessary conditions are met. Their story also highlights the importance of seeking advice and referring to equity release faqs to understand the implications of such a decision. With careful planning and the right guidance, they were able to continue enjoying their retirement in a new home that better suited their needs.

Key Takeaways and Learnings

This section summarises the key points from the article, highlighting the important aspects of moving house after taking equity release. The aim is to provide you with a concise overview of what has been covered and to outline any actions you might need to consider.

  • Equity release plans, including lifetime mortgages and home reversion plans, often allow you to move house, subject to certain conditions.
  • Portability is a key feature of many equity release products, but it's essential to check your plan's specific terms.
  • When moving, the new property must meet the criteria of the equity release provider, which could include value, location, and construction standards.
  • There are costs associated with moving house after taking equity release, such as valuation fees, legal costs, and potentially early repayment charges.
  • Financial implications of moving include the potential adjustment of loan amounts and interest rates.
  • Alternatives to moving, like home improvements or renting out space, could be considered to adapt your living situation without relocating.
  • Planning ahead and seeking professional advice are crucial steps in ensuring a smooth transition if you decide to move house.

In conclusion, while it is possible to move house after taking equity release, there are several factors to consider to ensure the move aligns with your financial situation and future goals. Understanding the terms of your equity release agreement, the eligibility of the new property, and the associated costs will help you make an informed decision. It is always advisable to consult with equity release advisers and legal experts to navigate this process effectively.


1) What Is an Equity Release FAQ and Where Can I Find It?

An equity release FAQ is a list of frequently asked questions that provides essential information on equity release schemes. It serves as a helpful resource for homeowners considering releasing equity from their property. Typically, these FAQs cover a variety of topics, including eligibility criteria, costs, types of plans, and implications for moving house.

You can usually find an equity release FAQ on the websites of equity release providers or advice services. It's also available through organisations like the Equity Release Council, which sets the standards for the equity release industry in the UK. These FAQs are designed to help you understand the complexities of equity release and to guide you in making an informed decision.

2) Can I Purchase a Second House With Equity Release?

Purchasing a second home with equity release is generally not straightforward due to the terms of most equity release schemes. These plans are intended for your main residence. However, if you're considering buying a new property and have an existing house with equity release, you may be able to transfer your equity release plan to the new home, provided it meets the lender's criteria.

If you're considering purchasing a second house, it's important to discuss this with your equity release adviser. They can help you understand the implications for your equity release plan and explore any possible options. Keep in mind that each situation is unique, and the terms of your equity release scheme will play a significant role in determining what is possible.

3) How Does Moving House Affect My Equity Release Plan?

Moving house can affect your equity release plan in several ways, depending on the terms of your agreement. If your plan is portable, you can move to a new property without financial penalty, as long as the new house meets the criteria set by your equity release provider. These criteria often include the property's value, location, and construction type.

It's important to inform your equity release provider ahead of any move. They will assess the new property and may readjust the terms of your equity release plan. If the new home does not meet the criteria, or if you decide to move without porting your plan, you may have to repay the equity release, which could include an early repayment charge.

4) Are There Equity Release Options for Non-Standard Construction Homes?

Equity release options for homes with non-standard construction can be limited. Lenders typically have strict criteria for the properties they accept as part of an equity release scheme, and non-standard construction can be seen as a higher risk. However, it's not impossible. Some specialist lenders may be willing to consider equity release on such properties, but the terms may differ, and the interest rates could be higher.

If you own a house with equity release and are looking to move to a property with non-standard construction, consult with your equity release adviser. They can help you understand which lenders may be open to considering your new property and advise on the potential implications for your equity release plan. Remember, it's essential to check these details before making any decisions about moving or altering your property.

Disclaimer: Please be aware that this site is no longer under active management. As a result, we cannot assure the accuracy or relevance of the content provided. Visitors should use their discretion and consider the potential for outdated or inaccurate information before relying on any material found here.

Disclaimer: Please be aware that this site is no longer under active management. As a result, we cannot assure the accuracy or relevance of the content provided. Visitors should use their discretion and consider the potential for outdated or inaccurate information before relying on any material found here.