Equity release guide
Equity release and care costs
Paying for care is one of the main reasons people ask about equity release. It can help with care at home, adaptations or a partner’s care home fees, but it is rarely the first option to look at. This guide explains how it works, what happens to a lifetime mortgage if you move into care, and what to check first.
Quick answer
Can equity release pay for care?
Yes. Money released through a lifetime mortgage can be spent on care. People use it for paid carers at home, for adaptations such as a stairlift or level-access shower, and, where one partner moves into a care home and the other stays at home, towards the care home fees or a top-up.
But it is often not the first option to look at. Care can be partly or fully funded by the council or the NHS, some benefits are not means-tested, and releasing money from your home can reduce the help you would otherwise get. Equity release also costs money: interest is usually added to the loan and compounds over time, which reduces what is left in your estate.
A lifetime mortgage is also not normally an option for paying your own care home fees if you live alone. A lifetime mortgage is designed to last while a borrower lives in the home. Once the last borrower moves permanently into long-term care, the plan usually ends and the loan is repaid.
For a short answer on care at home, see can I use equity release to fund home care or adapt my property?
Two different situations
Care at home compared with a care home.
How equity release could help depends on where care is given and who lives in the home. The table below is general and based on the rules in England. Scotland, Wales and Northern Ireland differ.
| Situation | How equity release could be used | What to watch |
|---|---|---|
| Care at home | Paying for carers, respite, cleaning or other support, often from a drawdown facility so money is taken as it is needed. | Your home is not counted in the council’s financial assessment for care at home, but released cash is. Care costs can last for years and rise over time. |
| Adapting your home | One-off costs such as a stairlift, ramps, a level-access shower or a downstairs bedroom. | Check grants and free council equipment first. Larger building work may need your lender’s consent. |
| One partner moves into a care home | On a joint plan, the partner who stays at home can keep the plan running and may use released money towards care home fees or a top-up. | The released money may affect the at-home partner’s benefits. Where the council arranges the place, a top-up needs a written agreement with the council and the care home. |
| The only or last homeowner moves into a care home | A lifetime mortgage is not normally available, and an existing plan usually ends. | Options such as the 12-week property disregard, a deferred payment agreement, renting out or selling the home are usually more relevant. |
On a phone, scroll the table sideways to see every column.
Care at home
Many people want to stay in their own home for as long as it is safe. Paid care and adaptations can make that possible, and equity release is one way to fund them.
The difficulty is that ongoing care has no fixed end date. A bathroom conversion has a quote; daily care visits can continue and increase for years. If you use equity release for home care, a drawdown lifetime mortgage lets you take a smaller amount first and more later, so interest is only charged on money you have taken. Taking smaller amounts may also avoid holding a large balance that counts against you in a financial assessment.
It also matters how much equity is left. If a move into a care home is needed later, less property wealth may be available to pay for it.
If you move into care
What happens to a lifetime mortgage when someone moves into long-term care?
It depends on whether the plan is in one name or two, and whether the move is permanent.
Single applicant
If you are the only borrower and you move permanently into long-term care, the plan usually ends and the loan, including the interest added, becomes repayable. It is normally repaid from the sale of the home, although the debt can be repaid from other money if the lender agrees. The time allowed to sell is set by your lender’s terms, so contact the lender early.
Joint applicants
If one of you moves permanently into care and the other carries on living in the home as their main residence, the plan usually continues. Nothing has to be repaid at that point. The plan normally ends when the last borrower dies or moves permanently into long-term care.
Temporary stays
A hospital stay, respite care or a short period of rehabilitation is not the same as a permanent move. Tell your lender if your plan requires it, and check your terms before assuming anything has changed.
Early repayment charges
Under the Equity Release Council’s current standards, launched in May 2025, any early repayment charge is waived if a borrower moves permanently into long-term care, on receipt of a medical practitioner’s certificate and as long as the plan’s terms have been met. Older plans may have different rules, so check your plan’s terms.
For more detail, read what happens to equity release if I move into a care home?
Means testing
How equity release can affect care funding.
It is easy to overlook. This is general information about how the rules work, not advice on your own entitlement.
When the council works out whether to help with care costs, it carries out a financial assessment (a means test). It looks at your income and your capital, such as savings and investments.
Money released through equity release counts as capital once it is in your account. That means it can reduce or remove council help with care costs, and it can affect means-tested benefits such as Pension Credit and Council Tax Reduction. Our guide to equity release and benefits explains the benefit side in more detail.
Why this matters for care at home
In England, if you receive care in your own home, the value of your home is not included in the council’s financial assessment. Releasing equity turns part of that home into cash, and cash can be counted. Someone who would have qualified for council help could lose it by releasing more than they need.
Spending the money to qualify does not work
Councils can look at money you used to have. If a council decides you deliberately reduced your capital to avoid care charges, it can treat you as if you still have it. This is called deprivation of assets.
| Nation | What the official guidance says | Source |
|---|---|---|
| England | Upper capital limit £23,250. Lower capital limit £14,250. Above the upper limit you normally pay the full cost of your care. Your home is not counted for care at home; it can be counted for a permanent care home place unless a partner or certain relatives still live there. | GOV.UK statutory guidance (paras 8.12 and Annex B) and NHS |
| Scotland | Personal care is free at home if your care needs assessment shows you need it, regardless of age, income or savings. From 1 April 2026, care home residents assessed as needing it can get £260.30 a week towards personal care and £117.10 a week towards nursing care. Other charges and capital limits are set separately; ask your council. | mygov.scot |
| Wales | Residential care: if you have capital over £50,000 you may have to pay the full cost. Care at home: you may pay up to a maximum of £100 a week, depending on your disposable income and whether your savings and investments are over £24,000 (not including the value of your home). | gov.wales |
| Northern Ireland | Care homes: over £23,250 in capital and you are assessed as able to pay for all your care. Capital between £14,250 and £23,250 is treated as giving you income. Your home counts as capital 12 weeks after a permanent move into a care home, unless certain people still live there. | nidirect |
These figures were checked on 26 October 2026 and can change, often each April. Always check the current figures with your council or Health and Social Care Trust.
Alternatives
Things to check before using equity release.
Some of these cost nothing. Others may suit better than borrowing against your home. Unless stated, the rules described are for England. For a wider comparison, see our guide to alternatives to equity release.
A council care needs assessment
Free, and anyone can ask for one. It sets out what help is needed. If you qualify for council support, a financial assessment follows to work out what you pay.
Source: NHS: getting a needs assessment · GOV.UK: find your council
NHS continuing healthcare
Some people with long-term complex health needs qualify for care arranged and funded solely by the NHS, at home or in a care home. It is free, and eligibility depends on assessed needs, not a diagnosis.
Source: NHS: continuing healthcare
Attendance Allowance
A benefit for people of State Pension age who need help with personal care because of a disability or health condition. It is not means-tested. In Scotland, Pension Age Disability Payment replaces it.
Source: GOV.UK: Attendance Allowance
The 12-week property disregard
In England, if your other savings are below the upper capital limit, the council must ignore the value of your home for the first 12 weeks after you move permanently into a care home. It gives time to decide what to do.
Source: GOV.UK: Care and support statutory guidance, Annex H
A deferred payment agreement
The council pays your care home fees and you repay later, when the home is sold or from your estate. Interest and admin charges can apply. Ask your council whether you qualify.
Source: NHS: paying for your own care · GOV.UK: statutory guidance, chapter 9
Downsizing
Moving to a smaller or more suitable home can release money without a loan, and may make care at home easier. Moving costs, stamp duty where it applies and the upheaval all need weighing up.
Savings, income and family help
Existing savings, pension income or help from family may cover shorter-term costs without borrowing against the home. Any gift or loan from family should be documented.
Source: MoneyHelper: long-term care
An immediate needs care annuity
A separate regulated product where a lump sum buys an income paid to the care provider. It is not something we advise on, so ask a specialist care fees adviser whether it is worth considering.
Consumer protection
Protections on Equity Release Council plans.
Lifetime mortgages from Equity Release Council members must meet its product standards. These protections apply subject to the plan’s terms and the lender’s criteria.
Family and advice
Talking it through with family
Decisions about care are often made quickly, after a fall or a hospital stay. That can make it harder to weigh up the options calmly. If you can, talk it through with your family before a crisis.
Equity release affects what your family may inherit, so it helps if they understand the decision. You can use our equity release inheritance calculator to see how a plan could affect your estate, and read more in our equity release and inheritance guide.
Family members are welcome at our meetings, whether in person, by phone or online, where available. Having someone you trust there can make it easier to ask questions and remember what was said.
Why advice matters
Equity release advice is regulated, and you can only take out a plan after advice. A good adviser should ask about care needs, benefits and council support, not just how much you can borrow. Where care funding or benefits need specialist input, we will tell you and point you to the right help.
No adviser fee. Lender, valuation and legal costs may apply.
Last checked: 26 October 2026. General information only, not personal advice. Care funding and benefit rules change and differ across the UK.
Common questions
Equity release and care costs FAQs.
These answers are general. A recommendation can only be made after your circumstances and alternatives have been assessed.
Can equity release be used to pay for care?
Yes. Money from a lifetime mortgage can be used for paid care at home, home adaptations or, where one partner stays in the home, towards a care home place for the other. It is not usually the first thing to look at. A council needs assessment, NHS support, Attendance Allowance and other options should be checked first, because they may cost less or nothing.
What happens to my lifetime mortgage if I move into a care home?
If you are the only borrower and you move permanently into long-term care, the plan usually comes to an end and the loan is repaid, normally from the sale of your home. The time allowed to sell depends on your lender. Check your plan’s terms and tell your lender early.
What happens if my partner goes into care and I stay at home?
On a joint plan, the lifetime mortgage usually continues while you live in the home as your main residence. Nothing has to be repaid at that point. Tell your lender about the change and check your plan’s terms.
Will equity release affect council help with care costs?
It can. Money you release counts as capital once it is in your account. If you receive care at home, your home’s value is not normally counted by the council in England, but cash released from it may be. That could reduce or remove council help with care costs and some means-tested benefits.
Do I have to sell my home to pay for care?
Not for care at home. In England, your home is not counted in the council’s financial assessment if you receive care in your own home. If you move permanently into a care home, your home may be counted unless a partner or certain relatives still live there. Councils may also offer a deferred payment agreement, so the home does not have to be sold straight away.
Is a deferred payment agreement better than equity release?
Neither is right in every case. A deferred payment agreement is arranged by the council for care home fees, and eligibility depends on your savings and circumstances. A lifetime mortgage is a private loan with its own interest, fees and protections. It is worth asking your council about a deferred payment agreement before deciding.
Can my family be involved in the conversation?
Yes. Family members are welcome at meetings, whether in person, by phone or online, where available. Many people find it helps to have someone they trust there, especially when care is being discussed.
Does The Mortgage Hive charge for equity release advice?
No. No adviser fee. Lender, valuation and legal costs may apply. If we recommend a lifetime mortgage and it completes, the lender may pay us commission.
Talk it through
Request a call back
If you are weighing up how to pay for care, we can talk through whether equity release is worth considering at all, how it compares with the alternatives and what it could mean for your benefits and estate. There is no obligation to go ahead, and family members are welcome to join.
No adviser fee. Lender, valuation and legal costs may apply.
Equity release includes lifetime mortgages and home reversion plans. To understand the features and risks, ask for a personalised illustration. Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.
Important information: Equity release includes lifetime mortgages and home reversion plans. To understand the features and risks, ask for a personalised illustration. Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits. A lifetime mortgage is secured against your home. It may involve early repayment charges and can affect future financial flexibility. Home reversion plans involve selling part or all of your home. No adviser fee. Lender, valuation and legal costs may apply. This page provides general information and is not a personal recommendation or legal, tax, care funding or benefits advice. Care funding rules differ in England, Scotland, Wales and Northern Ireland and can change.