There are two equity release types, a lifetime mortgage or a home reversion plan, and lifetime mortgages come in several kinds that can be combined.
So the choice runs in two steps: first between borrowing against your home and selling part of it, then, for most people, between the kinds of lifetime mortgage. How those options fit your age, health and plans for the house deserves a proper look with an FCA-authorised adviser who specialises in equity release; this page's short form books that conversation at no charge.
What are the types of equity release plan?
The Equity Release Council says there are two types, lifetime mortgages and home reversion plans, and that the Financial Conduct Authority regulates both. Within each, it adds, there are many different options, so picking a type is only the first part of the decision. Not every firm offers both: Aviva's guide to the types (last updated 1 July 2026) says it provides lifetime mortgages only.
The FCA's MCOB 3A.2 rules require firms' communications, non-real time financial promotions included, to use the term "lifetime mortgage" for the loan and "home reversion plan" for the sale, and no other wording. The equity release guide follows the process from first call to completion.
Lifetime mortgage types and options
With a lifetime mortgage you borrow against the property and keep owning it. Legal & General's guide to the types (8 April 2026) names five kinds: interest roll-up, optional payment, payment term, income and enhanced. One plan can carry several of these features. Aviva's lifetime mortgage, for instance, pairs a cash lump sum with an optional cash reserve, voluntary part-repayments and an optional inheritance guarantee.
Lump sum, drawdown or income
The money can come as a lump sum or in smaller, regular amounts, and some plans let you borrow more later up to a maximum agreed with the provider, according to the Council's lifetime mortgage page. Its Standards define a drawdown as a facility arranged during your application; later drawdowns are not guaranteed and are charged at the interest rate in force when you make the new application. Aviva, for one, sets "a new interest rate for each amount you take out".
Legal & General's income lifetime mortgage pays the money as a regular income instead, usually for a fixed period. The drawdown guide looks at reserves in detail, and equity release as an income at the regular-payment route.
Rolling up the interest, or paying it
On a roll-up plan nothing falls due in your lifetime, and Legal & General warns that "any unpaid interest is added to your loan, which means the amount you owe can grow quickly". The Council says some plans let you pay the interest monthly instead, in part or in full, with an option to roll it up later if the payments become unaffordable. Aviva's page (31 March 2026) allows voluntary part-repayments with no early repayment charge, up to 10% of the total amount borrowed each policy year, excluding accrued interest, with a minimum of £50 an instalment. More in the interest-only lifetime mortgage guide.
A third design makes payments compulsory for a set period: the Council's Standards call these mandatory payment lifetime mortgages, and if the payments are not made the home is at risk of repossession. Legal & General's payment term lifetime mortgage is one, for people aged 50 and over. You pay interest for a pre-agreed term that can run up to age 75, after which the interest is added to the loan, and the firm says that if you do not keep up the payments, "as a last resort your home could be repossessed".
Enhanced lifetime mortgages
Legal & General says enhanced lifetime mortgages "suit people who want a lifetime mortgage and aren't in very good health" and "work like standard lifetime mortgages, but let you access more equity or a lower interest rate". Impaired health can mean a bigger lump sum for some borrowers, according to the Council, and Aviva bases its rates and borrowing limits on circumstances that include health and lifestyle details. Which of your own health conditions a lender might count is something an FCA-authorised specialist can explain, free, on the call that follows this page's enquiry form. More on how an enhanced lifetime mortgage works.
Inheritance protection
You can choose to ring-fence part of the home's value for your family, the Council says. Aviva calls its version an inheritance guarantee: a percentage of the sale price of your home, "rather than a specific sum", chosen only when you apply, and which "may affect the amount that you can borrow". The inheritance you leave will still be reduced, it adds; see how equity release affects inheritance.
Equity release plan types compared
Sources and dates are in the last column; the table maps features rather than ranking them.
| Type or feature | What it does | What to weigh | Source |
|---|---|---|---|
| Lump sum | The whole loan is taken at once. | The alternative is payments of different amounts as and when you need them. | Legal & General, types of equity release, 8 April 2026 |
| Drawdown | A facility set up at application for taking more later. | Not guaranteed; each later drawdown is charged at the rate in force at the new application. | Equity Release Council, The Standards, May 2025 edition |
| Income | Money paid as a regular income, usually for a fixed period. | Can be combined with a small lump sum. | Legal & General, 8 April 2026 |
| Interest roll-up | No monthly payments; unpaid interest is added to the loan. | The amount owed can grow quickly. | Legal & General, 8 April 2026 |
| Optional payments | You pay some or all of the monthly interest, and can stop at any time. | Interest you pay is not added, so the loan grows slowly or not at all. | Legal & General, 8 April 2026, and its optional payment page |
| Mandatory payments | Payments are required for a set period. Legal & General's payment term plan: aged 50 and over, term up to age 75, then interest is added. | Missed payments put the home at risk of repossession. | Equity Release Council, The Standards, May 2025 edition; Legal & General, 8 April 2026 |
| Enhanced | For people who are not in very good health. | Can give access to more equity or a lower interest rate. | Legal & General, 8 April 2026 |
| Inheritance protection | A percentage of the home's sale price is kept back as inheritance. | Chosen only at application; may affect how much you can borrow; the inheritance is still reduced. | Aviva, 31 March 2026 |
| Home reversion | A sale of part or all of the property. | You may stay until death or a permanent move into care, if it remains your main home and the terms are kept; on a move, a new plan on terms no less favourable than for new customers. | Equity Release Council, The Standards, May 2025 edition |
Home reversion plans
A home reversion plan is a sale rather than a loan: MoneyHelper describes selling some or all of your home to a provider, usually for less than its market value. Under the Council's reversion standards you can live in the home until you die or permanently go into care, so long as it remains your main home and you keep to the plan's terms. Should you move, the provider must offer a new plan on the new home on terms no less favourable than it gives new customers, and may charge reasonable costs for setting it up. The same body's consumer guide (August 2025) says reversion is usually available from age 60. What a home reversion plan is covers it in full, and home reversion versus a lifetime mortgage weighs one against the other.
Which Equity Release Council standards apply to each plan?
The Council calls itself "a voluntary trade body", and its Standards (May 2025 edition) are rules its members follow, not law. There are three sets: core lifetime mortgage standards, mandatory payment lifetime mortgage standards and home reversion standards. Among the core ones:
- Interest rate: fixed, or variable with a fixed cap, and in both cases set for the whole life of the loan.
- No negative equity guarantee: provided the loan's conditions were met and the sale achieved the best price reasonably available, neither you nor your estate can owe the lender more than the home's value, once reasonable selling costs are deducted.
- Moving home: you must be given the chance to take the loan to a suitable new property, subject to the lender's criteria when you move and to keeping to the contract.
- Repayments: you must be able to pay money back without charges, subject to the provider's lending criteria.
On mandatory payment plans the repayment standard is narrower: the minimum it requires is charge-free repayments once the mandatory period has ended, again subject to lending criteria. Home reversion has its own standards, including the home-for-life right and the option to move described above. The Council standards page covers the detail.
Points to weigh whichever plan you choose
These hold across the board, as the main equity release guide explains. On a lifetime mortgage with rolled-up interest the debt keeps growing, and the earlier you start, the more builds up. With either type, what you leave behind shrinks. Means-tested benefits can be affected: see equity release and benefits. Agreements can carry early repayment charges; repaying early explains when. In Scotland, the security for a lifetime mortgage takes the form of a standard security. Under Council standards, independent legal advice from your own solicitor is part of the process: see the solicitor's role.
Equity release plans and products: quick answers
Is an equity release scheme the same as a plan or product?
In everyday speech, yes. MoneyHelper itself uses "scheme" when it describes the information firms must give you before you decide; in the FCA's rules, though, firms must use the names lifetime mortgage and home reversion plan.
Is an equity release mortgage like an ordinary mortgage?
Both are secured on your home, but the Council describes a lifetime mortgage as one that does not require monthly repayments. Is equity release a loan? compares the two.
Which type of equity release is most common?
Lifetime mortgages, according to Aviva's guide to the types, which also says Aviva itself offers no home reversion plans. For firms that do, see who offers home reversion plans.
Do I need to pick a type before talking to an adviser?
Not necessarily. The Council says part of a customer's choice is the type of plan, and that matching it to your current and future needs is something an equity release qualified adviser can help with. Starting that conversation costs nothing, and this page's short form gets an FCA-authorised specialist to ring you.
What if a plan does not meet the Council's standards?
Its protections, the Council says, come only with products that meet its Standards, and an adviser recommending one that does not must explain why and what the risks are. It is worth asking which standards a plan meets; choosing an equity release adviser covers what else to check.
Choosing between the types
The types differ in who owns the home, whether interest is paid or added, how the money arrives and what is kept back for family. The right mix depends on your age, health, home and plans. To hear how the trade-offs look for your own home, an FCA-authorised equity release adviser can phone you back without charge once you send this page's form.
Sources: Equity Release Council, What is equity release?, Lifetime Mortgage and Our Standards, with its Standards V2.0, May 2025 and consumer guide, August 2025; Legal & General, Types of equity release (8 April 2026) and Optional Payment Lifetime Mortgage; Aviva, Types of equity release (last updated 1 July 2026) and What is a lifetime mortgage? (31 March 2026); MoneyHelper, Equity release explained (archived 19 September 2026); the FCA Handbook's MCOB 3A.2; and Conveyancing and Feudal Reform (Scotland) Act 1970, s9, on legislation.gov.uk.