Can I Release Equity From My Home If I Still Have a Mortgage?

Yes, in many cases, you can release equity even if you still have a mortgage.

When this happens, part of the money you release is usually used to repay your existing mortgage at completion. This clears the balance, and allows your new lifetime mortgage, which is a loan secured against your home, to begin.

People choose this route for many reasons - easing day-to-day finances, clearing existing debts, helping family, or simply creating more flexibility in later life. Whether it’s suitable for you will depend on your age, your home, and what you want the money to help with. 

This guide explains how equity release with an existing mortgage works, what the process involves, and the key things to think about. So you can decide whether releasing equity is right for you.
 

How to get equity out of your home if you still have a mortgage?

It’s often possible to release equity even if you still have an existing mortgage. When your plan completes, your lender will require the existing mortgage to be repaid — usually using part of the money you release. As that balance is being cleared, your new lifetime mortgage begins.

Here’s an overview of how the process usually works:

1. Check your eligibility: You’ll be asked for details such as your age, property value and remaining mortgage balance. This gives an early indication of how much you may be able to release.
2. Your property valuation: The lender will arrange a valuation and confirm how much can be released based on the value of your home, your age and the plan.
3. Releasing the money: When the plan completes, the required funds are used to repay your existing mortgage. If any money remains after this, it’s released to you as a lump sum or, if suitable, through a drawdown facility you can access later.

People look at equity release for different reasons: reducing monthly outgoings, reshaping retirement finances or helping family members. If you’re using equity release to repay existing debt, it’s worth checking whether your existing mortgage has early repayment charges before you start.

The amount you can release depends on your age, your property and the recommended plan. A Key adviser can talk you through your options, compare equity release with alternatives such as a later-life mortgage, and help you decide what fits with your future plans.
 

Taking equity out of your home vs. Traditional remortgaging

If you’re thinking about unlocking money from your home, you may also be considering a traditional remortgage. Both routes work differently, and the right choice depends on your circumstances.

Equity release

• Designed for people aged 55 and over.
• Lets you unlock money from your home while staying in it.
• Monthly repayments aren’t required unless you choose to make them.
• The loan is usually repaid when the last remaining borrower passes away or moves into long term care.

Traditional remortgage

• You move to a new mortgage deal.
• Monthly repayments continue as normal.
• Lenders assess income and affordability, which may suit you if regular repayments fit comfortably within your budget.

Releasing equity can reduce your monthly outgoings, but it will also reduce the value of your estate due to compound interest. A remortgage gives you control through regular payments, but only if those repayments remain manageable.

If you’d like to compare both routes side by side, you can explore how equity release works, look at lifetime mortgages or consider standard remortgage options. A Key adviser can talk you through the differences and help you understand which approach may suit your plans.
 

Things to consider before releasing equity with a lifetime mortgage

If you still have an existing mortgage, it will need to be repaid when your lifetime mortgage completes. Many people use part of the funds they release to clear the remaining balance. Early repayment charges may apply, so you will need to check how much these will be.

Here are a few things to consider:

• What you want to leave behind: Releasing equity will reduce the value of your estate. Plans that meet Equity Release Council standards include a no negative equity guarantee, and some also offer features like inheritance protection or optional repayments if they matter to you.
• Your eligibility: Lenders look at your age and property value. A valuation will confirm how much you may be able to release.
• The costs involved: There will be fees for advice, legal work and setting up the plan, so it helps to factor these in early.
• What you want the money to do: Whether you're hoping to reduce your monthly outgoings, clear existing borrowing or create more financial flexibility, being clear on your goals will make the process easier.
   

Get personalised equity release advice with Key

If you still have an existing mortgage, equity release could still be an option. What’s right for you will depend on your age, the value of your home and what you want the money to help with. Having clear, simple information can make the decision feel much easier.

A Key adviser can talk you through your options, check any early repayment charges on your current deal, and explain how each route might work for your circumstances. They’ll outline the benefits and considerations — including how releasing equity will reduce the value of your estate.

Our advice is designed to feel honest, personal and trusted. You set the priorities, whether that’s easing monthly outgoings, clearing an existing balance or creating more financial flexibility. We simply help you understand what’s possible.
 

Be financially aware
Lifetime mortgages are secured loans. Compound interest means the amount you owe can grow quickly.

Equity release reduces your estate's value and may impact means-tested benefits. It may leave little or no property equity, reducing future financial options. You should always think carefully before securing a loan against your property to repay existing debt.

It’s always free to explore your options with Key. Our fixed advice fee of £1,699 is only payable on completion.
 

 

Releasing Equity with a Mortgage - FAQs

 

Can I get an equity release if I still have a mortgage?

Often yes. To be eligible for a lifetime mortgage, the lender will require your existing mortgage to be repaid either before or upon completion, usually from the new funds. They assess age, property value and type, construction, and loan-to-value, then confirm amounts after a valuation.

A lifetime mortgage can clear the balance and release cash for later-life needs. Check any early repayment charges on your existing mortgage first. Your case is unique, so speak to a financial adviser before you proceed.
 

What are the restrictions on equity release?

Restrictions differ by lender, but most follow Equity Release Council standards. You need to be at least 55, own an eligible property and meet loan-to-value guidelines that increase with age.

Any secured borrowing is repaid at completion. If you intend to make repayments, some lenders may also check affordability.
 

Does equity release affect what I can leave to my family?

It can. Because compound interest is added over time, releasing equity will reduce the value of your estate. Many plans offer features such as inheritance protection or optional repayments, which may help you safeguard a portion of your property’s value.