Equity release can pay for adaptations and upkeep on a home that has become hard to manage. So can selling it and buying somewhere smaller. Before we recommend a lifetime mortgage, we check whether the home itself is still the right one.

This case study covers Wendy and John, who asked us about raising money to adapt and maintain their home. A lifetime mortgage would have raised more than they needed. They chose to downsize instead, after talking it through with their family and our adviser Neil Massam.

Meet The Clients 👫

Wendy and John, aged 75 and 77, are both retired. They lived in Longton, in an older detached house worth around £430,000.

They owned the house outright, with no mortgage and no other debts.

The Challenge They Faced 🏡

Wendy and John were struggling to maintain the property. They wanted to adapt it for later life, and they needed money for the adaptations and for general maintenance costs.

They asked us about raising the funds.

How We Helped 💡

What equity release would have provided. A lifetime mortgage could have raised up to around £198,000 against Wendy and John's home. That was more than enough for the work they had in mind.

The conversation that changed the plan. Neil discussed their circumstances with Wendy, John and their family. In that conversation, they said the house was now too big for them and hard to maintain. Their family live in Leyland.

Neil and the family raised downsizing as an option. Borrowing against the house would have paid for the adaptations, but Wendy and John would still have been living in a house that was too big for them. A smaller property in Leyland offered four things: a home that is easier to maintain, more amenities and services, family close by, and money released from the sale without borrowing.

Their decision. The choice was left to Wendy and John. They chose to downsize.

The Outcome 📝

Wendy and John sold the house in Longton for £430,000 and bought a bungalow in Leyland for £225,000. They bought it outright, with no mortgage.

They now live close to their family, in a home that is easier to maintain, with more amenities and services nearby. They are living more comfortably, physically and financially.

The sale released funds without any borrowing. There is no interest to pay and no loan secured on their home.

We did not charge Wendy and John a fee, and we earned nothing from the case.

Why Advice Matters 🤝

Equity release would have done what Wendy and John first asked for. Downsizing dealt with the reason they were asking: a house that was too big for them and hard to maintain.

Downsizing is not right for everyone. It means leaving your home, and it has one-off costs, including estate agent and legal fees, removals and stamp duty where it applies. It also depends on a suitable property being available in the right place. A lifetime mortgage lets you stay where you are with no required monthly payments, but any unpaid interest is added to the loan and compounds.

We look at the alternatives before recommending equity release. You can read about them in our guide to the alternatives to equity release and on our later life planning page.

Equity Release or Downsizing? Your Questions Answered 🙋

Is downsizing cheaper than equity release?

Downsizing involves no borrowing, so there is no interest. It does have one-off costs: estate agent and legal fees, removals and stamp duty where it applies. On a lifetime mortgage, any interest that is not paid is added to the loan and compounds. Which costs less overall depends on the two property prices, the cost of moving and how long the lifetime mortgage would run.

Can I use equity release to pay for home adaptations?

Yes. Adapting a home is one of the common reasons people use equity release, and Wendy and John could have raised up to around £198,000 this way. Our guide to the alternatives also covers grants for adaptations, such as the Disabled Facilities Grant.

Should I involve my family in the decision?

It is your decision, but involving family can help. In Wendy and John's case, the conversation with their family is where the size and upkeep of the house came up, and that changed the outcome.

Can I still take equity release after downsizing?

A lifetime mortgage can be taken on a home that meets the lender's criteria, and the amount available depends on the age of the youngest borrower and the value of the property. Wendy and John own their bungalow outright, so the option remains open to them.

Look at Every Option Before You Decide

We look at equity release alongside the alternatives, including the ones we do not earn from. Get in touch to arrange a conversation with one of our advisers, or read more of our equity release case studies.