Can I Sell My House If I Have Equity Release

At Towerstone, we provide specialist property accountancy services for homeowners, landlords, and property investors. We have written this article to explain what happens when you sell with an equity release plan, helping you make informed decisions.

This is a very common and very understandable question. Equity release is often taken out later in life to improve cash flow, clear debts, or support family members, but circumstances change. People downsize, move closer to family, enter care, or simply decide they want a different living arrangement. When that happens, the first concern is usually whether equity release locks you into your home forever.

The reassuring answer is yes, you can usually sell your house if you have equity release, but there are important conditions, costs, and practical steps you need to understand before making any decisions. Equity release does not stop you selling your property, but it does affect how the sale works and what happens to the proceeds.

In this guide, I will explain how equity release interacts with selling your home, what normally happens to the loan, when early repayment charges apply, and the common pitfalls people run into. This is written in clear UK English and based on how equity release products work in practice.

What Equity Release Actually Is

Before looking at selling, it helps to briefly recap what equity release means.

Equity release allows you to unlock some of the value tied up in your home while continuing to live there. The most common type is a lifetime mortgage.

With a lifetime mortgage:

You borrow money secured against your home

You usually make no monthly repayments

Interest rolls up over time

The loan is repaid when the property is sold, usually after death or a move into long term care

Some older plans involve home reversion, where part or all of the property is sold to a provider, but lifetime mortgages are by far the most common today.

Does Equity Release Prevent You Selling Your Home?

No, equity release does not prevent you selling your home.

Most modern equity release plans are designed with the expectation that people may sell or move at some point. The key point is that selling the property triggers repayment of the equity release loan.

In simple terms, when you sell:

The sale completes

The equity release loan is repaid from the sale proceeds

Any remaining money belongs to you

However, the detail around costs and timing matters a lot.

What Happens to the Equity Release Loan When You Sell?

When you sell a property with equity release, the loan does not transfer automatically to the buyer. Instead, one of two things happens.

In most cases:

The property is sold

The equity release loan plus interest is repaid in full

The loan is closed

If you are downsizing, some providers allow a porting option, which I will explain shortly.

Early Repayment Charges Explained

One of the biggest concerns when selling with equity release is early repayment charges.

Many equity release plans include early repayment charges, often shortened to ERCs. These charges apply if you repay the loan earlier than expected.

Key points to understand:

ERCs are common, but not universal

The size of the charge depends on the plan and how long it has been running

Charges often reduce over time and may eventually fall to zero

In some cases, early repayment charges can be substantial, so this needs to be checked before you decide to sell.

Situations Where Early Repayment Charges Often Do Not Apply

There are certain situations where ERCs are often waived.

These commonly include:

Death of the homeowner

Permanent move into long term care

Sale after a defined period has passed

Sale linked to downsizing under specific terms

The exact rules depend on your individual contract, so you need to check the paperwork or speak to the provider.

Downsizing With Equity Release

Many people take equity release and later decide to move to a smaller or cheaper property. Modern equity release products often allow for this.

This is known as porting the equity release.

Porting usually means:

You sell your current home

You buy a new property

The equity release loan is transferred to the new property

However, this is not automatic.

Conditions for Porting Equity Release

For porting to be allowed, the new property must usually meet the lender’s criteria.

This often includes:

Minimum property value

Acceptable construction type

Location within the UK

Sufficient value to support the loan

If the new property is cheaper, you may be required to partially repay the loan, sometimes without early repayment charges, depending on the plan.

What If the New Property Is Cheaper?

If you downsize to a lower value property, there is often a gap between the loan amount and what the new property can support.

In that case:

Part of the equity release loan may need to be repaid

The provider may waive ERCs on that portion, depending on the contract

The remaining loan is secured on the new property

This is a common scenario, but the rules vary significantly between providers.

What If You Want to Sell and Rent Instead?

Some people sell their home with equity release and decide to rent rather than buy again.

In this case:

The equity release loan will usually need to be repaid in full

Early repayment charges may apply unless an exemption applies

You then keep whatever funds remain after repayment

Equity release products are designed for owner occupiers, so once you stop owning a property, the loan cannot continue.

Selling After Moving Into Care

A very common trigger for selling a home with equity release is a move into long term care.

In most modern plans:

Moving permanently into care triggers repayment of the loan

Early repayment charges are usually waived

The property can be sold without penalty

This is an important protection and is built into most reputable equity release products.

How Much Will Be Left After Selling?

One of the biggest worries people have is whether there will be anything left after repaying the loan.

This depends on:

How much was originally borrowed

How long the loan has been running

The interest rate

How the property value has changed

Equity release interest compounds, which means the balance can grow significantly over time. However, reputable plans include a no negative equity guarantee, meaning you will never owe more than the property is worth.

Can I Be Forced to Sell?

In normal circumstances, you cannot be forced to sell just because you have equity release.

However, there are obligations you must meet, such as:

Keeping the property in reasonable condition

Maintaining buildings insurance

Living in the property as your main home

Failure to meet these conditions could, in extreme cases, lead to enforcement action, but this is rare.

Selling Part of the Property Is Not Possible

You cannot usually sell part of your home while keeping the equity release in place.

Equity release is secured against the whole property. Selling a portion, such as part of the garden or a share of the house, is usually not allowed without the provider’s consent and often triggers repayment.

What About Home Reversion Plans?

If you have a home reversion plan, the position is slightly different.

With home reversion:

You sold part or all of your home to the provider upfront

The provider owns that share

When the property is sold:

The sale proceeds are split according to ownership shares

You receive your agreed percentage

The provider receives theirs

There are usually no loans or interest to repay, but you will only receive the share you retained.

Practical Steps Before You Decide to Sell

Before making any decisions, it is essential to do the following.

First, locate your original equity release paperwork and identify the type of plan you have.

Second, check whether early repayment charges apply and how they are calculated.

Third, ask the provider whether porting or downsizing is possible.

Fourth, obtain an up to date redemption figure showing exactly how much would need to be repaid.

Finally, take independent advice, ideally from a regulated equity release adviser, before committing to a sale.

Common Mistakes I See

In practice, people often make the same mistakes.

They assume they cannot sell at all, which is usually wrong. They underestimate early repayment charges and are shocked by the figures. They agree a sale before checking whether porting is possible. Or they rely on memory rather than checking the actual contract.

All of these can be avoided with early checks.

Emotional and Family Considerations

Selling a home with equity release is not just a financial decision.

It often involves:

Family expectations

Inheritance planning

Care decisions

Emotional attachment to the home

Open conversations with family and professional advice can prevent misunderstandings later.

My Professional View

In my professional opinion, equity release gives flexibility, but that flexibility is defined by the contract.

You are not trapped in your home, but you are also not as free as someone with no borrowing. Selling is usually possible, downsizing is often possible, but the costs and conditions matter enormously.

People who understand their options early tend to make far better decisions than those who wait until circumstances force a sale.

Final Thoughts

So, can you sell your house if you have equity release?

Yes, in most cases you can. Selling the property will usually trigger repayment of the equity release loan, and depending on the timing and the terms of your plan, early repayment charges may or may not apply. Downsizing and porting the loan is often possible, but subject to strict criteria.

The key takeaway is that equity release does not lock you in forever, but it does change how selling works. Before putting your house on the market, always check the terms of your plan, obtain a redemption figure, and get proper advice.

Understanding the rules upfront gives you control, clarity, and far fewer surprises when it matters most.

If you would like to explore related property guidance, you may find can i sell part of my house and can my ex wife claim half my new house useful. For broader property guidance, visit our property hub.