Equity Release and Moving Home

Can I move house with equity release?

Yes, in most cases you can move house after taking out an equity release plan. This is a reassuring answer to a question that stops many people from investigating equity release at all — the concern that they would be permanently tied to their current property is understandable but largely unfounded for modern ERC-approved plans.

All Equity Release Council-approved products must be portable — the ERC's product standards require that lenders allow customers to move to a suitable alternative property without triggering early repayment charges, subject to the new property meeting the lender's lending criteria. This is an important consumer protection and worth confirming explicitly on any product you consider.

That said, portability is not unconditional. The lender must agree that the new property is acceptable security, and in some cases — particularly downsizing to a significantly cheaper or less conventional property — complications can arise.

How portability works

Porting an equity release plan means transferring the existing loan — along with its current balance and interest rate — from your current property to the new one. The process typically works as follows:

1. You notify your equity release lender that you intend to move and wish to port the plan.
2. The lender assesses the proposed new property against its lending criteria (value, construction type, condition, tenure, location).
3. If the new property is approved, the loan is transferred on completion of the move. Your existing interest rate is maintained.
4. If the new property requires a smaller loan (because it is cheaper), the balance is reduced accordingly and the difference is paid from the sale proceeds.
5. If the new property would support a larger loan and you wish to borrow more, this may be possible subject to your age and the lender's criteria at the time.

The process is handled through your solicitor in parallel with the conveyancing for the property sale and purchase. It adds some complexity compared with a standard move, but is a routine process for solicitors experienced in equity release work.

What lenders assess on the new property

Lenders apply essentially the same criteria to the new property as they did to your current home when the plan was first taken out. Key factors include:

• Minimum property value: Most lenders require a minimum value of £70,000–£100,000. Moving to a very modest property may restrict the number of lenders willing to accept the transfer.
• Construction type: Standard brick and tile construction is straightforward. Non-standard construction — timber frame, concrete panel, thatched roofs — may be assessed more cautiously or declined by some lenders.
• Tenure: Freehold properties are the most straightforward. Leasehold properties are accepted by most lenders but must meet minimum remaining lease requirements — typically 75 years or more remaining after the expected loan term.
• Condition: The property must be in reasonable condition. Significant structural defects identified by the valuer may need to be addressed before the transfer can proceed.
• Location: Most standard UK residential locations are acceptable. Some lenders have restrictions on very rural properties, properties above commercial premises, or those in areas with limited resale markets.

An independent valuation of the new property will be required, commissioned by the lender. The cost of this valuation is typically paid by you.

What if the new property does not qualify?

If the lender declines to accept the new property as security, you have limited options:

• Repay the loan: The sale proceeds from your current property can be used to repay the equity release loan in full. Early repayment charges may apply depending on the product and the circumstances of the repayment — though some products include downsizing protection clauses that waive the ERC in certain situations (see below).
• Find an alternative lender: If another lender would accept the new property, it may be possible to repay the existing plan and take out a new equity release product — though this involves additional costs and the new plan would be at current rather than historic interest rates.
• Reconsider the move: In some cases, the property intended for purchase simply does not fit any lender's criteria for equity release. This is more commonly an issue for unusual property types than for standard homes.

The practical message is clear: if you think you may want to move in future, check your plan's portability terms carefully before taking it out, and give thought to the types of property you might want to move to.

Downsizing: what happens if the new property is worth less

Downsizing — moving to a smaller, cheaper property — is one of the most common reasons people move after taking equity release. If the new property is worth less than the current one, the loan balance may exceed the maximum the lender will advance against it.

In this situation, the shortfall must be repaid from the sale proceeds. For example: your current home sells for £350,000, the outstanding loan is £120,000, and the new property is worth £200,000 with a maximum LTV of 40% (£80,000). The lender will transfer £80,000 to the new property; the remaining £40,000 of the loan balance must be repaid from the sale proceeds. You would receive the surplus — in this case £350,000 minus £120,000 = £230,000 in your hands, minus the purchase price of the new property.

If the sale proceeds are insufficient to repay the full loan balance — an unlikely scenario protected by the no-negative-equity guarantee — the lender absorbs the shortfall. Your estate is not liable for any remaining debt.

Downsizing protection features

Some lifetime mortgage products include a specific downsizing protection clause. This allows you to repay the loan in full without incurring early repayment charges if you downsize after a specified period — typically five years from the start of the plan — provided the repayment is triggered by a genuine move to a smaller property.

Downsizing protection is not standard on all products, and the precise terms vary. It is worth checking whether any product you consider includes this feature, particularly if you think downsizing is a realistic possibility in the medium term. For a broader comparison of equity release versus downsizing as a strategy, see our dedicated page: Equity Release vs Downsizing.