Downsizing vs Equity Release — Which Leaves You Better Off?
Downsizing and equity release are the two most common ways for homeowners over 55 to release value from their property. They work completely differently — and the choice affects not just your cash position, but where you live and what you leave behind. This calculator shows the financial comparison side by side.
Figures are illustrative. Costs vary. This calculator does not account for the personal, lifestyle, or non-financial factors involved in a decision to downsize.
| Downsizing | Equity Release | |
|---|---|---|
| You keep your home | No | Yes |
| Net cash received | — | — |
| Upfront costs | — | ~£2,500 |
| Ongoing cost | None | Interest compounds |
| Estate impact | Home sold; proceeds distributed | Loan reduces estate |
This calculator is for illustrative purposes only. It does not constitute financial advice.
The hidden costs of downsizing
Most people focus on the price difference between properties. The costs that erode that gap are real: a 1.5% estate agent fee on a £450,000 property is £6,750; stamp duty on a £250,000 purchase is currently nil, but on a £350,000 purchase it is £5,000; legal fees for both transactions typically run to £2,400–£4,000; and removal and redecoration add another £3,000–£15,000 depending on distance and condition of the new property. Before net cash is counted, £15,000–£30,000 in costs may have already been spent.
What equity release costs
Equity release has lower upfront costs than downsizing — typically £2,000–£3,500 in arrangement, valuation, and legal fees. The ongoing cost is the interest that compounds over time. For someone who lives in their home for another 15 years, the interest cost is significant. For someone in their 80s, the compounding period may be much shorter.
The question money cannot answer
Many people who work through this comparison and find equity release generates similar or better cash still choose to downsize — because they want a more manageable home, a different location, or fewer maintenance responsibilities. The calculator is a starting point, not a conclusion.
Reviewed by Chris, CII-qualified equity release specialist · Last reviewed July 2026
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