Comparison Guide Updated 26 October 2026 · 7 min read
If you own your home and want to access its value in later life, you broadly have two routes: sell and move to a smaller property, or stay put and release equity from the home you're in. Both can work well. Neither is automatically right. The best choice depends on your health, your family, your finances and - critically - what you want your retirement to look like.
Equity Release Council approved lenders
Independent, impartial advice
| Factor | Equity Release | Downsizing |
|---|---|---|
| Upfront costs | Arrangement fee £500–£1,500; solicitor £1,000+; valuation | Estate agent 1–3%; stamp duty 2–12%; legal fees (both sides); removals |
| Ongoing costs | Interest rolls up at typically 6–7% AER (no monthly payments on lifetime mortgages) | Running costs of new, smaller property (usually lower) |
| Lifestyle impact | Stay in your home; minimal disruption | Move to a new home; potential loss of space, garden or neighbourhood |
| Flexibility | Can draw further funds if drawdown facility; early repayment charges apply | Clean break; proceeds are yours; no debt attached to the property |
| Estate impact | Loan plus rolled-up interest repaid on death or care; reduces inheritance | Net proceeds available now; simpler estate position |
| Minimum age | Typically 55 (some lenders 60+) | No restriction |
| Eligibility | Property must meet lender criteria; health can improve terms | Open to all - subject to onward purchase if buying |
The cost of downsizing
Downsizing is often presented as the "free" option, but the transactional costs are substantial. If you sell a £600,000 property and buy at £350,000, a rough cost breakdown might look like this:
- Estate agent fees: 1.5% of £600,000 = £9,000
- Stamp Duty on £350,000 purchase: approximately £7,500 (standard residential rates in England)
- Legal fees (sale and purchase): £2,000–£3,500
- Removals and storage: £1,500–£5,000
- Redecoration and fitting out: variable, often £3,000–£15,000+
Total transaction costs of £23,000–£40,000 are realistic. That's money that comes directly out of the equity you were hoping to release - before you've spent a pound on what the money was for.
The cost of equity release
Equity release (typically a lifetime mortgage) carries lower upfront costs, but the interest rolls up compound over time. At a rate of 6.5% AER, a £100,000 loan doubles to roughly £200,000 after approximately 11 years. This erosion of your estate is the primary drawback. Key upfront costs include:
- Arrangement fee: £500–£1,500 (often added to the loan)
- Independent solicitor: £1,000 or more
- Valuation: £300–£600
- Advice fee: varies by adviser
Many lenders allow you to ring-fence a portion of your property value as a guaranteed inheritance, which can make the estate impact more predictable.
When each option tends to make sense
Equity release may suit you if…
- You want to stay in your home and community
- You have limited physical ability to manage a move
- Your beneficiaries are financially comfortable and inheritance is secondary
- You need a lump sum or income but can't service monthly repayments
- Your property has enhanced lending criteria (enhanced plans for health conditions)
Downsizing may suit you if…
- You're willing to move and can find a property you'd be happy in
- Your current home is larger than you need and maintenance is a burden
- Preserving as much estate as possible is important to you
- You want a clean break from property debt
- Transaction costs can be absorbed comfortably within the freed equity
A third route: bridging finance to bridge the gap
It's worth noting that a short-term bridging loan can sometimes solve a timing problem - for example, if you want to buy your next property before your current home has sold. This avoids rushed downsizing decisions made under pressure. We can discuss whether this fits your situation.
Want to explore your options in confidence?
We'll give you a clear, honest picture of what's available - no jargon, no pressure, and no obligation.