A plain-English guide to what happens to your plan, your property, and your family’s position — from the moment of death to the final settlement
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The repayment process follows a clear sequence. Understanding each step can help your family feel prepared — and knowing what to expect means there are no unwelcome surprises at an already difficult time.
As soon as is practical after the death, your executor should contact the equity release lender directly. The lender will need a copy of the death certificate and details of the executor’s authority (usually a Grant of Probate or Letters of Administration). The lender will then formally acknowledge the repayment trigger and set out the next steps in writing.
If you have a joint plan and your partner has died but you are still living in the property, the plan does not end at this point — see Section 4 for how joint plans work.
Once the lender has been notified, the estate will typically arrange an independent valuation of the property. The executor then works with a solicitor and estate agent to prepare the property for sale. There is no forced or rushed sale — Equity Release Council standards require lenders to give the estate a reasonable period (up to 12 months) to achieve a fair market price.
It is worth noting that interest continues to accrue on the outstanding loan during this period. Prompt communication with the lender and a well-managed sale process help keep the total repayment figure as low as possible.
When the property sale is completed, the solicitor handling the conveyancing will pay the lender directly from the proceeds. The repayment amount is the original loan plus all rolled-up interest accumulated since the plan began. The lender provides a final redemption statement confirming the exact figure owed at the point of repayment.
After the lender has been repaid in full, any surplus from the sale proceeds belongs to the estate and is distributed to your beneficiaries in line with your will (or the rules of intestacy if no will exist). If you want to understand how this affects what your loved ones ultimately receive, our guide on how equity release affects what you leave behind covers this in full.
Typical timeline: From death to final settlement, the process usually takes between three and twelve months, depending on how quickly probate is granted and how long the property takes to sell.
This is one of the most important distinctions in equity release — and one that families often don't fully understand until they need to act on it. Whether you have a single plan or a joint plan makes a significant difference to what happens when the first person dies.
Death triggers repayment immediately
If the equity release plan is held in one person’s name only, their death triggers the repayment process described in Section 3. The property must be sold and the loan repaid, even if a partner or family member is living in the home.
This is an important consideration for couples. If only one partner is named on the plan — perhaps because the other did not meet the minimum age requirement at the time — the surviving partner has no automatic right to remain in the property under the equity release plan itself. They may need to make alternative arrangements.
This is one of the reasons we always encourage couples to explore joint plans from the outset. If you’re considering equity release and having a partner, speak to an adviser before proceeding — this is exactly the kind of scenario a whole-of-market adviser will help you plan around.
First death does NOT trigger repayment
If the equity release plan is held in joint names, the death of one partner does not bring the plan to an end. The surviving partner retains their full right to remain in the property, and the plan continues exactly as before — with no repayment required until the second trigger event occurs.
The plan only becomes repayable when the last-named homeowner either dies or moves permanently into long-term care. This means the surviving partner can continue living in their home for the rest of their life, with no disruption to their living arrangements and no pressure to sell.
When the surviving partner eventually dies (or moves into care), the standard repayment process described in Section 3 applies.
Brief cross-reference: If you’re thinking about what happens when a partner moves into care rather than dies, our guide to equity release to pay for care covers the care-trigger repayment rules in detail.
No two people receive exactly the same equity release interest rate. Lenders assess a combination of personal and property factors when calculating your offer. Here are the six key variables:
The rate you lock in on day one has a compounding effect on everything that follows. Here's what that means in practice:
Interest is added to your loan balance each year, which means next year’s interest is calculated on a larger figure. Over 15–20 years, this effect is significant.
As the illustrative table in Section 3 shows, a 1% difference in rate can mean tens of thousands of pounds more — or less — remaining in your estate when the property is eventually sold.
Most modern lifetime mortgage plans allow you to make voluntary repayments (typically up to 10% of the outstanding balance per year) without triggering early repayment charges. Paying even a small amount regularly can meaningfully reduce how much interest builds up.
Some plans allow you to ring-fence a percentage of your property’s future value for your family — regardless of how much interest accumulates. Your adviser can explain which plans offer this feature.
Every ERC-compliant plan includes a No Negative Equity Guarantee. This means your estate will never be required to repay more than the proceeds from the sale of your home — your family will never inherit equity release debt.
Because rates vary across lenders, searching the whole market helps ensure you’re not paying more than necessary. This is what independent, whole-of-market advice is for.
We believe in giving you the full picture. Here's a balanced look at the rate-specific advantages and drawbacks of equity release — not a comprehensive pros and cons list (you can see the complete equity release pros and cons guide for that), but an honest assessment of what roll-up interest means for you.
Equity release interest rates are often compared unfavourably to standard mortgage rates — but that comparison misses something important: the rate structure is fundamentally different. Here's how the rate mechanics of each option compare. For a full product-by-product comparison, see the full equity release alternatives guide.
Rate type: Fixed for life · No monthly repayment obligation · Interest rolls up annually · Rate reflects no-term, no-repayment risk structure
Rate type: Variable or fixed term · Monthly interest payments required · Headline rate may appear lower · Requires proof of income to service payments
Rate type: Fixed or variable, typically 2–5 year terms · Monthly capital and interest repayments required · Requires income assessment · Not available to many retirees
Rate type: No interest rate — but an opportunity cost · Using savings avoids borrowing costs entirely · Depletes capital that could otherwise be earning returns or retained as a buffer
Rate type: No rate · No borrowing cost · But needs go unmet and options may narrow with age
The key point: equity release rates are priced to reflect a product that carries no monthly repayment obligation and no fixed term. Comparing the headline rate to a standard mortgage without accounting for this structural difference is not a like-for-like comparison. For a rate-versus-cost perspective on downsizing vs equity release, our comparison guide covers this in detail.
We’ve helped 12,400+ UK homeowners access £332m+ in tax-free cash — and we’ve been doing it for 15 years. Here’s what you get when you work with us:
Equity release isn't right for everyone — and we'll always tell you honestly if it isn't the best option for you. Here's a quick self-assessment to help you think it through.
If you’re unsure which category you fall into, a good next step is a no-obligation conversation with one of our advisers. There’s no pressure — just honest, regulated guidance at your pace.
After a period of significant volatility between 2022 and 2023 — when rates rose sharply alongside the wider mortgage market — equity release interest rates have broadly stabilised. Rates across the market currently sit within a range that reflects the current interest rate environment, though the exact figure you’re offered will depend on your personal circumstances, property, and the lender.
We don’t quote a specific rate here because doing so would be misleading — your rate is personal to you. What we can say is that a whole-of-market search gives you a strong chance of finding a competitive rate for your profile. The only way to know your actual rate is to speak with an adviser who can assess your situation properly.
When you take out a lifetime mortgage, you borrow a lump sum (or draw down funds over time) secured against your home. Rather than making monthly repayments, the interest accrues on your outstanding balance and is added to the loan each year. The following year, interest is then calculated on the new, larger balance — this is the compounding effect.
For example: if you borrow £80,000 at a 6% MER, after one year you owe approximately £84,800. In year two, the 6% is applied to £84,800 — not the original £80,000. Over 10, 15, or 20 years, this compounding means the total balance can grow considerably. The illustrative table in Section 3 of this guide shows exactly how this plays out at different rates.
Yes — for all Equity Release Council-compliant plans, the interest rate must be fixed for the life of the plan, or capped if variable. This is a mandatory consumer protection standard that all ERC member firms — including Access Equity Release — must adhere to.
What this means for you: the rate agreed on the day your plan is confirmed is the rate that applies for as long as the plan runs. It cannot be increased by the lender, regardless of changes to the Bank of England base rate or the wider mortgage market. This gives you complete certainty when planning for the future.
Several personal and property factors influence the rate a lender will offer you. The most significant are your age (older applicants often qualify for lower rates), the loan-to-value ratio (how much you’re borrowing relative to your property’s value), your property type (standard construction attracts more lenders), and your health.
This last point is particularly important: if you have certain health conditions — such as heart disease, diabetes, a history of cancer, or even if you smoke — you may qualify for an enhanced lifetime mortgage, which carries a lower interest rate. This is because the lender’s risk profile changes when life expectancy is shorter. Many people are unaware that their health could actually work in their favour when it comes to rate. Your adviser will always explore this possibility as part of a whole-of-market search.
Yes — most modern lifetime mortgage plans allow you to make voluntary repayments, typically up to 10% of the outstanding balance each year, without triggering early repayment charges. This is sometimes called an interest-servicing option or a voluntary repayment facility.
Making even modest regular repayments can significantly slow the rate at which your loan balance grows. For example, if your annual interest is £5,000 and you repay £2,000 per year, only £3,000 is added to your balance — reducing the compounding effect over time. Your rate remains fixed regardless of whether you make repayments. This option is worth discussing with your adviser if preserving equity for your family is a priority.
Equity release interest rates are typically higher than standard residential mortgage rates — but this comparison requires important context. A standard mortgage is priced assuming regular monthly repayments over a defined term (typically 25 years), with the lender recovering their capital and interest throughout. A lifetime mortgage carries no monthly repayment obligation and has no fixed end date — the lender may not recover their capital for 15, 20, or even 25+ years.
This structural difference means the rate reflects a fundamentally different risk profile. It’s not a like-for-like comparison. For a fuller picture of what equity release costs are relative to other options, see the full equity release costs guide.
Your interest rate is not locked in at the point of advice — it is confirmed when your formal mortgage offer is issued by the lender, typically several weeks into the application process. The offer will specify your rate and will remain valid for a set period (usually 3–6 months, depending on the lender).
If market rates change between the time, you receive advice and the time your offer is issued, the rate in your offer will reflect conditions at that point. Once the offer is issued and accepted, your rate is fixed. This is why it’s worth progressing your application promptly once you’ve decided to proceed. The overall process — from initial advice to funds in your account — typically takes 6–8 weeks.
The interest rate is the ongoing cost of your plan — but setting it up involves a number of one-off upfront fees, including an advice fee, a solicitor’s legal fee, and a property valuation fee. These are separate from the interest that rolls up over time.
For a complete breakdown of every cost involved — including typical fee ranges and what to expect — see the full equity release costs guide. We’ll always be transparent about every cost before you make any decision, and there is no advice fee unless you proceed.
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