Equity Release Declined Guide
Why Has My Equity Release Application Been Declined? 15 Reasons a Lender May Say No
Being turned down by one lifetime mortgage lender does not necessarily mean that every lender will reach the same decision.
Different providers can have different property, lending and underwriting criteria. The most important step after a refusal is to understand exactly why the application failed before deciding what to do next.
Can You Be Refused Equity Release?
Yes. A lifetime mortgage application can be declined if the homeowner, property, amount required or another part of the transaction does not meet the lender’s criteria.
That does not automatically mean equity release is unavailable everywhere.
At My Later Life, we can review what happened with a previous application and search suitable equity release lenders and plans available through our service.
The aim is not simply to apply repeatedly until somebody says yes. It is to identify the reason for the refusal and establish whether there is a suitable way forward.
Why exactly did the lender decline my equity release application?
15 Common Reasons Equity Release Can Be Declined
The home may fall below the provider’s minimum acceptable value.
The maximum available may not be enough to meet your needs.
The surveyor may value the property below your expectation.
Some construction types can reduce lender choice.
Subsidence, cracking or previous underpinning may need investigation.
The remaining lease term may not meet the lender’s rules.
The lender may be concerned about future saleability.
Past or future flood exposure can affect lender appetite.
This can make roof inspection and property assessment more difficult.
Flats may need additional fire-safety and external-wall checks.
Nearby shops, pubs or industrial premises can affect saleability.
Restrictions, access problems or unusual ownership can cause difficulties.
Adult children, tenants or partners may create legal considerations.
Serious disrepair can make a property unacceptable security.
A case may simply sit outside one provider’s rules.
Does Being Declined Mean You Cannot Get Equity Release?
Not necessarily.
A lender may refuse a case because the property is outside its criteria, the amount requested is too high, further evidence is required, a legal issue needs resolving, repairs are required or the valuation is lower than expected.
However, another lender is never guaranteed to accept the case. If there is a serious structural, legal or property problem, changing lender may not solve it.
Choosing the best equity lease broker can help your chances as My Later Life is a whole of market provider so we know what lender will work best for you .
1. Your Property Value Is Too Low
Lifetime mortgage providers normally have minimum property-value requirements. These can vary according to the lender, property type and sometimes the location.
If your home falls below one provider’s minimum acceptable value, another lender may potentially have different criteria.
2. You Need to Release More Than the Lender Will Allow
Equity release is normally limited to a percentage of the property’s value. The amount available can depend on your age, the age of the youngest applicant, property value, lender, plan selected and health or lifestyle information where enhanced terms may be available.
| Illustrative requirement | Amount |
|---|---|
| Existing mortgage | £95,000 |
| Additional money required | £20,000 |
| Estimated fees and charges | £5,000 |
| Total required | £120,000 |
If the lender can only provide £105,000, there is a £15,000 shortfall. The issue may be insufficient borrowing rather than a blanket refusal of equity release.
3. The Surveyor Values Your Home Lower Than Expected
You may believe your property is worth £450,000 because of estate-agent estimates, online valuations or recent sales nearby. The lender will rely on its own valuation.
Illustrative example
Expected property value: £450,000
Lender valuation: £390,000
Money required: £130,000
If the lower valuation reduces the maximum available below £130,000, the original application may no longer work.
4. Your Home Has Non-Standard Construction
Some properties need additional consideration, including concrete, steel-framed, timber-framed, prefabricated or cob homes, unusual roofing materials and properties with large areas of flat roof.
A non-standard property is not automatically impossible. It may simply reduce the number of lenders prepared to consider it.
5. There Is Subsidence or Structural Movement
A surveyor may raise concerns about cracking, historic subsidence, active movement, previous underpinning, structural repairs, serious damp or timber deterioration.
A lender may ask for a structural engineer’s report, repair documents or evidence that historic movement is no longer active.
6. Your Lease Is Too Short
Leasehold properties can qualify for equity release, but the remaining lease term is important. This can particularly affect flats, maisonettes, retirement apartments, ex-council flats and older converted properties.
A lease that does not meet one lender’s criteria may potentially be acceptable to another, or an extension may sometimes resolve the issue.
7. The Location Makes the Property Difficult to Sell
A home can be structurally sound but still cause concern because of its surroundings. Potential issues include industrial premises, busy commercial properties, pubs, nightclubs, takeaways, petrol stations, railway infrastructure, electricity infrastructure or unusual access arrangements.
Real-world example from the MoneySavingExpert forum
A public MoneySavingExpert forum discussion involved a retired couple aged 70 and 68 who wanted to use later-life borrowing to repay a £60,000 mortgage shortfall and release additional money for home improvements.
According to the homeowner, several applications had been declined because the property was next door to a commercial heating and cooling business. The stated concern was the future saleability of the property.
A forum contributor also pointed out that one lender declining a property does not necessarily mean every lender will make the same decision.
Read the public MoneySavingExpert forum discussion.
Forum posts are user-generated and should not be treated as personal financial advice.
8. Your Property Is in an Area with Flood Risk
Lenders may consider previous flooding, river flooding, surface-water flooding, coastal flooding, insurance availability and previous claims.
Being in a flood-risk area does not automatically mean equity release will be declined.
9. Spray Foam Insulation Has Been Installed
Spray foam can make it harder for a surveyor to inspect the roof structure or assess whether moisture and deterioration are present.
A lender may ask for further evidence, request a specialist report, require removal, refer the case for review or decline the property.
Please speak to My Later Life if this is the issue; we work with specialist contractors who can remove the spray foam so you can get Equity release. Spray foam issue?
10. There Are Cladding or Building-Safety Concerns
Flats and apartments may need extra checks around external wall systems, cladding, building height, fire-safety documentation, service charges, ground rent, lease terms and future saleability.
11. Your Property Is Above or Next to Commercial Premises
A property above or next to commercial premises is not automatically excluded. The lender may consider the type of business, noise, smells, opening hours, access, insurance and future marketability.
12. There Is a Problem with the Legal Title
Potential difficulties include restrictive covenants, missing rights of access, unusual title arrangements, agricultural restrictions, existing legal charges, lease problems, trust ownership and boundary issues.
13. Another Person Lives in the Property
Lifetime mortgage providers need to know who occupies the home. This might include adult children, relatives, a partner who is not an applicant, lodgers, carers or tenants.
The implications depend on the person’s legal rights and the lender’s requirements.
14. Your Home Is in Poor Condition
Issues such as major roof problems, serious damp, structural defects, extensive unfinished renovation, unsafe areas, missing kitchen or bathroom facilities and significant disrepair can concern a surveyor.
Establish exactly what the lender requires and whether completing the work is likely to make a difference.
15. You Simply Do Not Meet That Lender’s Criteria
You may simply fall outside one provider’s rules. Lenders can differ in how they approach property values, flats, ex-council homes, construction types, flat roofs, flooding, lease length, commercial neighbours, existing mortgages, credit history, maximum loan-to-value and location.
Declined, Referred or Zero Valuation: What Is the Difference?
Declined
The lender has decided it cannot proceed with the application in its current form.
Referred
The lender needs more information before making a final decision.
Zero valuation
The surveyor may not consider the property acceptable security for that lender in its current circumstances.
Can Bad Credit Cause Equity Release to Be Declined?
Bad credit does not automatically prevent equity release. Some providers may consider missed payments, mortgage arrears, CCJs, IVAs, debt-management arrangements or previous bankruptcy.
Individual circumstances still matter and some debts or legal charges may need to be dealt with before or at completion.
Can Low Income Stop You Getting Equity Release?
Not necessarily. A standard roll-up lifetime mortgage is not normally assessed using exactly the same monthly affordability model as a conventional repayment mortgage.
However, your wider financial circumstances remain important when deciding whether equity release is suitable.
Can You Be Refused Because of Your Age?
Age affects lifetime mortgage eligibility and the maximum amount available. For a joint application, the age of the younger applicant is particularly important.
Removing a younger homeowner from the property ownership simply to qualify for equity release can have serious legal and financial consequences and should not be treated as an automatic solution.
Can You Be Refused Because of What You Want the Money For?
Potentially. Equity release can be used for many purposes, but the adviser still needs to consider whether the proposed borrowing is appropriate.
Common uses include repaying an existing mortgage, home improvements, adaptations, supporting retirement spending, helping family and replacing large essential items.
What Should You Do If Your Equity Release Application Has Been Declined?
Establish whether the issue is valuation, property, legal title, construction, loan size or eligibility.
This might include valuation comments, lease details, structural reports, insurance evidence or a mortgage redemption figure.
Repairs, documentation, a lease extension, reduced borrowing or clearing a legal charge may sometimes help.
The next application should ideally be made only after the original reason for refusal has been considered.
A retirement interest-only mortgage, later-life repayment mortgage, savings, downsizing or another solution may be more appropriate.
Illustrative Example: Declined Because of the Property
Peter is 72 and owns a property worth approximately £375,000.
He applies for a lifetime mortgage, but the surveyor reports that a significant proportion of the roof is flat and the chosen lender decides the property does not meet its criteria.
Instead of immediately applying somewhere else, his adviser first establishes exactly why the property was declined and then checks whether any suitable providers have criteria that may allow that roof construction.
This is a simplified illustration and does not describe an identifiable My Later Life customer.
Illustrative Example: A Lower Valuation Creates a Shortfall
Jean and Michael believe their property is worth approximately £450,000. They need £130,000 to repay an interest-only mortgage and cover other costs.
The lifetime mortgage valuation comes back at £390,000, meaning the maximum available from the provider is below the amount they require.
Options might include contributing savings, considering a suitable provider with different lending limits, extending the existing mortgage, considering another later-life mortgage or downsizing.
This is a simplified illustration and not a personal recommendation.
Why My Later Life Can Help After an Equity Release Refusal
At My Later Life, we can review why your previous application was declined, the valuation outcome where available, property type, construction, location, property value, existing mortgage, amount required, age, credit circumstances, leasehold or legal issues and your plans for the future.
We can then search across suitable equity release lenders and plans available through our service.
Where another lifetime mortgage is appropriate, we can compare interest rates, fees, drawdown options, voluntary repayment allowances, early repayment charges, inheritance protection and moving-home provisions.
If equity release is not suitable, we can explain the relevant alternatives.
Our aim is not to keep applying until we find a lender willing to say yes. Our aim is to help identify a suitable solution that fits your circumstances.
15 Questions to Ask After an Equity Release Refusal
- Why exactly did the lender decline me?
- Was the issue my property or my circumstances?
- What did the surveyor say?
- Was my property value lower than expected?
- Was I given a zero valuation?
- Does the lender require further information?
- Can the problem be fixed?
- Could another lender consider this property type?
- Would repairs make a difference?
- Is the amount I need too high?
- Could savings cover a shortfall?
- Will another application mean another valuation fee?
- Could another later-life mortgage be more suitable?
- Should I consider downsizing?
- Has the reason for the first refusal been checked before I apply again?
Equity Release Declined FAQs
Can equity release be refused?
Yes. A lifetime mortgage application can be declined if you, the property, the amount required or another aspect of the transaction does not meet the lender’s criteria.
Does being refused once mean I cannot get equity release?
No. Different lenders may apply different criteria. However, another provider is not guaranteed to accept the application.
Why would a property be refused for equity release?
Possible reasons include property value, construction, structural condition, location, lease length, flood risk, legal-title issues and future saleability.
Can equity release be refused after valuation?
Yes. The surveyor may identify concerns that were not apparent before the physical valuation took place.
What is a zero valuation?
It usually means the surveyor does not consider the property acceptable security for that lender in its current circumstances.
Can another lender accept me after I have been declined?
Potentially. Different lenders can have different criteria, but another application is never guaranteed to succeed.
Can bad credit stop me getting equity release?
Not necessarily. Some providers may consider previous credit problems, although debts, arrears and legal charges can affect the application.
Can spray foam insulation stop equity release?
Potentially. A lender may ask for further evidence, a specialist report, removal of the foam or may decide the property is unsuitable.
Can subsidence stop equity release?
Potentially. Historic or active structural movement can require specialist investigation and may affect whether a lender will accept the property.
Can a short lease stop equity release?
Yes, if the remaining lease term does not meet the lender’s requirements.
Can an ex-council property get equity release?
Potentially. The result can depend on the property type, construction, location and individual lender criteria.
Can I get equity release on a flat above a shop?
Potentially, although the type of commercial premises, access and future saleability can affect lender acceptance.
Can commercial premises next door cause a decline?
Yes. Nearby commercial premises can influence a lender’s view of future saleability.
Will low income automatically stop equity release?
Not necessarily, although your wider financial circumstances remain important when deciding whether a lifetime mortgage is suitable.
Can I appeal an equity release valuation?
Sometimes a lender may consider a valuation review if relevant evidence is available, but there is no guarantee the valuation will change.
Has Your Equity Release Application Been Declined?
Speak to My Later Life about why the application was refused, whether another suitable lender may have different criteria and what alternatives may be available.
Call 0207 100 4255 Explore Your OptionsWhy Has My Equity Release Application Been Declined? The Final Answer
Yes, equity release can be refused. But being declined by one lender does not always mean that equity release is impossible.
The most important thing is to establish exactly why the application failed.
If the problem relates to that lender’s particular property criteria, another suitable provider may potentially take a different view.
If there is a structural, legal, valuation or property problem, the issue may need to be resolved first.
And sometimes the right conclusion is that equity release is not the most suitable option.
At My Later Life, we can review a previously declined equity release application, investigate the likely reason for the refusal and search suitable lifetime mortgage and later-life lending options available through our service.
That gives you a much better starting point than simply submitting another application and hoping for a different answer.
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Sources and useful guidance: This article refers to the Financial Conduct Authority’s findings on equity release sales and advice, Equity Release Council product standards and a public MoneySavingExpert forum discussion as an example of consumer experience.
Important information: Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.
A lifetime mortgage is a loan secured against your home. Interest may be added to the amount borrowed, which means the balance can increase through compound interest.
Plans meeting Equity Release Council product standards include important protections for customers, including the right to remain in the property for life or until moving permanently into long-term care, subject to the plan conditions, and a No Negative Equity Guarantee.
Read the Equity Release Council product standards.
N.B. “This is a lifetime mortgage. To understand the features and risks, please ask for a personalised illustration. Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.”
The examples in this article are simplified illustrations. They are not quotations, guarantees or personal financial recommendations. Individual lender criteria and property requirements can vary.
Written by Graham Clelland equity release expert for My Later Life
