Equity release affects inheritance because the loan and its interest are repaid from your home first; your family receives what is left. Here is how.
If you are weighing a lifetime mortgage and wondering what your children or other heirs would receive, the short answer is less than they otherwise would, and sometimes nothing. How much less depends on how much you borrow, how long the plan runs and what you choose to protect. Only someone looking at your own home and age can put real numbers on it. A qualified equity release adviser can do that with you: fill in the short form here and they phone back, free of charge. The rest of this page covers what the plan does to an estate, whatever you decide.
What is left when the plan ends
Nothing is repaid while you live in the home, unless you choose to pay some of the debt back. The Equity Release Council explains that the interest compounds and that your estate repays the loan, with the rolled-up interest, when you die or move into long-term care. For a couple, it carries on until the last of you still at home has died or gone into care.
So the order is fixed. The home is sold, the lender is repaid, and your estate keeps whatever remains. MoneyHelper's wording is that if you leave the property to someone in your will, "they will only receive what’s left after the loan is repaid, or the portion that you didn’t sell." The second half of that sentence covers a home reversion plan, where the provider owns a share outright; home reversion compared with a lifetime mortgage sets out the difference.
The loan is a debt of the person who died, and GOV.UK's guidance on valuing an estate lists mortgages among the debts an executor has to identify. How that sits with inheritance tax is a question for the executor or a tax adviser.
Why the debt grows while you wait
On a roll-up plan no monthly payment is due, so each period's interest is added to the balance and the next interest charge is worked out on the larger total. MoneyHelper points out that a plan started younger runs for longer, so more interest accumulates. Our guide to how the interest works goes through the mechanics.
The table is our own arithmetic, not any lender's offer. It assumes £100,000 borrowed once, a rate of 5% a year compounded annually, no repayments and no fees, set against a home worth a flat £400,000. Real homes can rise or fall in value, and no one is promised 5%; see equity release rates for how pricing is set.
| Years after taking the loan | Owed with interest | Left from a £400,000 sale, before sale costs |
|---|---|---|
| 10 | £162,889 | £237,111 |
| 15 | £207,893 | £192,107 |
| 20 | £265,330 | £134,670 |
Our arithmetic, dated 20 October 2026. The debt in the table passes £200,000, double the amount borrowed, between years 14 and 15, while the interest itself is larger each year than the last.
Paying some interest during the plan slows this down, as the interest-only lifetime mortgage page explains, but it does not stop the loan reducing what is left.
The guarantee that caps the debt
The worry in the other direction is a debt larger than the house. Under the Equity Release Council's standards, a member's product must carry a no-negative-equity guarantee. As long as the sale achieves the best price reasonably obtainable and the loan's conditions have been kept, the amount due from you or your estate is capped at the property's value after reasonable sale costs. In plain terms, your family should not be asked to find money from elsewhere to clear the loan.
That guarantee limits the loss; it does not protect an inheritance. Where the home sells for less than the debt, the sale price after costs can go entirely to the lender and the heirs receive nothing. It is also a standard that Council members follow, not a rule for every firm: the Council's standards page covers what is and is not included.
Setting some of the value aside
Some lenders let you ring-fence part of what the home will fetch for your heirs, chosen when you apply. Legal & General's roll-up lifetime mortgage page describes an option "to secure a proportion of the net sale proceeds of your home". Aviva offers an optional inheritance guarantee: you keep back a percentage of what the home is worth for family, and in exchange can borrow less.
Even with protection the loan still takes a share: Legal & General's risk list makes the same point about its own option, and so does Aviva's. How the protected share is set, what it is a share of and whether it can be changed later are questions for each lender's terms and illustration. Answers differ plan by plan, so settle the protected share with an adviser before any offer is signed (you can ask for that first meeting on the form on this page); the comparison guide lists the other features worth lining up beside it.
After a death, and why family should know first
Aviva's guidance says the sale is handled by an executor if there is a will, and administrators if there is not. "The people managing your estate have up to 12 months to repay the lifetime mortgage", its process page says, with more time possible while a sale is progressing, and "Interest continues to build until the lifetime mortgage has been repaid in full". That is Aviva's stated period; another lender may set a different one, so the plan's own terms matter, and delay can shrink what is left. The practical steps are covered on the redemption statement page.
Because the people who deal with the repayment are usually family, the Equity Release Council advises getting qualified advice and, where possible, talking the plan over with them first, and Aviva notes that some people find it helps to bring a relative to the adviser meeting. Under the Council's standards each customer must also receive independent legal advice, so a solicitor of your own goes over the plan before it completes. A Scottish home is pledged through a standard security, the Scots equivalent of a mortgage charge (Conveyancing and Feudal Reform (Scotland) Act 1970, s 9). A lifetime mortgage can also affect means-tested benefits (see equity release and benefits) and may carry an early repayment charge if it is paid off early (repaying early); our equity release guide covers the whole plan.
Questions people ask
Can equity release leave my family nothing?
Yes. Aviva's own wording is that a lifetime mortgage means you "will leave a lower – and possibly no – inheritance". The longer the plan runs and the more is borrowed, the more likely that is.
Is equity release a way to give my family an early inheritance?
Some people release money to help family now. Legal & General warns that "If you gift the money, the recipient may need to pay inheritance tax in the future." The effect on the tax position depends on your circumstances, so it is worth raising with an adviser before gifting anything.
Does paying the interest protect the inheritance?
It slows the growth of the debt, so more may be left, but the original loan still has to be repaid from the estate.
Can my family repay the loan without selling the house?
The loan is usually repaid from the sale. A lender's terms may allow other ways of repaying within the repayment period; Aviva's guide says the loan can be repaid "in any way really", though usually through a sale. Heirs can ask the lender what it allows.
Next step
What your family would receive turns on the amount, the plan, the protection option and the home. Want illustrations for your own property? A qualified equity release adviser will call you back if you pass your contact details along on the form on this page.
Sources (read 20 October 2026): Equity Release Council, What is equity release? and Professional Standards & Guarantees; MoneyHelper, What is equity release? (archived 19 September 2026); Legal & General, Interest roll-up and Lifetime mortgages; Aviva, Equity release process, FAQs and Equity release; GOV.UK, Valuing an estate.