Yes, equity release can be paid back either when the plan ends or earlier if your lender allows voluntary repayments.
Lifetime mortgages often allow up to 10% of the loan to be repaid each year without penalties.
Early repayment charges may apply if you exceed the allowed repayment limit or exit your plan early.
Home reversion plans require buying back the share you sold, which can be expensive if property values rise.
Voluntary repayments can reduce interest and leave more inheritance for your family.
Always check plan conditions, repayment rules, and speak with a qualified equity release advisor before committing.
Equity release allows homeowners aged 55 and over to unlock cash tied up in their property without having to sell it. The money can be used for home improvements, paying off debts, or enjoying retirement. A common question is: can equity release be paid back? The answer is yes, but the process depends on the type of plan you choose and its repayment rules.
When is Equity Release Paid Back?With most equity release plans in the UK — particularly lifetime mortgages — the loan and interest are typically repaid when the last borrower dies or moves into long-term care. The property is usually sold, and the proceeds cover the outstanding balance.
However, modern equity release products often include flexible repayment options. This means you can start paying back some or all of the money before the plan ends, reducing how much interest builds up over time.
“We always recommend considering paying back some of the equity release you take. Even small voluntary repayments can make a big difference by reducing the interest that builds up over time, helping to protect more of your property’s value for the future.” –
Graham, My Later Life
Voluntary Repayments on Lifetime Mortgages
Many lifetime mortgages now allow borrowers to make voluntary repayments. These can be monthly, yearly, or occasional lump-sum payments. Most plans allow you to repay up to 10% of the original loan each year without penalty. By doing so, you significantly cut down the interest that would otherwise compound over the years.
If you want to repay more than the allowed limit or pay off the loan early, you might face early repayment charges (ERCs). These vary by provider, so it’s essential to read the terms of your agreement carefully.
Home Reversion Plans and Repayment
Home reversion works differently. You sell part of your home to a provider in exchange for a tax-free lump sum. There’s no interest to repay, but if you want to buy back the sold portion of your home early, you’ll have to pay the current market value. This can be costly if property prices have increased.
Why Repaying Early Can Be a Smart Move
Save on Interest – Reducing the loan early means less compound interest.
Protect Inheritance – More of your property’s value can be left to your loved ones.
Financial Flexibility – Voluntary payments allow you to control how much is owed when the plan ends.
Important Things to Consider
Early Repayment Charges – Check if your plan has penalties for overpayments.
Future Financial Needs – Ensure you won’t need the funds you use for repayments later in life.
No Negative Equity Guarantee – Most equity release plans ensure you’ll never owe more than the value of your home.
What Happens After Death or Moving to Care
When the borrower dies or moves into care, the property is usually sold. The money from the sale repays the outstanding balance. If there’s any money left over, it goes to your estate or beneficiaries. With no negative equity guarantees, your family won’t be left with additional debt if the property value is lower than the loan amount.
Final Thoughts
Equity release can be paid back during your lifetime, and doing so may save a significant amount of interest and protect your inheritance. Choosing the right plan — one that allows flexible or penalty-free repayments — is key. Always consult a specialist advisor to explore your options and ensure the plan suits your long-term financial goals.
