The short answer is yes, you can be refused equity release. However, the good news is that the majority of applications are accepted, and a refusal from one lender doesn’t mean the door is permanently closed.
Understanding the most common reasons for refusal and what you can do about them puts you in the strongest possible position when you apply.
What is equity release?
Equity release is a financial product designed for homeowners aged 55 and over that allows you to access the cash tied up in your property without having to sell or move out. You can receive the funds as a lump sum, in regular drawdowns, or a combination of both.
There are two main types of equity release available in the UK: Lifetime mortgages and Home Reversion Plans.
Find out more in our article What is Equity Release?
Can you be refused equity release?
Yes, but it’s less common that many people assume, and a refusal is rarely final. Unlike a standard mortgage, equity release lenders don’t assess affordability in the traditional sense. There are no monthly repayment obligations on most plans, and your income isn’t the primary factor in the decision. Instead, lenders focus heavily on your property and your personal eligibility.
Most refusals come down to the property not meeting a lender’s specific lending criteria, rather than anything personal about the applicant.
The most common reasons for equity release refusal
- Age requirements not met: The youngest homeowner must be at least 55 for a lifetime mortgage, or 60 for a home reversion plan. On joint applications, both owners must meet the threshold.
- Property value below the minimum threshold: Most lenders require a property value of at least £70,000, and the minimum release amount is typically £10,000, although with some lenders it may be possible to borrow less. If your home falls below these figures, equity release is unlikely to be an option.
- Non-standard property construction: Lenders need confidence they can resell the property in future, so unusual construction types can cause issues. Common examples include timber or steel frame homes, concrete panel builds, flat roofs covering more than 25% of the property, and homes with spray foam loft insulation in the roof space.
- Poor property condition: A surveyor will assess your home on the lender’s behalf. Structural problems, subsidence, damp, roof damage, Japanese knotweed, or significant clutter can all lead to a decline. Completing remedial works before applying may improve your chances.
- Property location: Very remote properties, homes near commercial premises, or those in floodr risk areas or on contaminated land may be refused by certain lenders. Criteria vary significantly between providers, which is why advice matters.
- Homes with short leases: Leasehold properties with less than 75 years remaining on the lease may be declined. You can approachapporach the freeholder and ask to increase the length of the lease but there may be significant costs involved and you will need a solicitor. ht
- Title and deed restrictions: If a third party has the right to restrict or prevent the sale of your property, most lenders will decline. Issues such as forestry restrictions or incomplete shared ownership staircasing can all present obstacles.
- Outstanding mortgage debt that’s too high: An existing mortgage can usually be rolled into the equity release product, but only if the outstanding balance is well below 50% of your property’s value. If the debt is too high relative to the equity available, the application may not stack up.
Can you get equity release with bad credit?
Unlike traditional mortgages, equity release is not primarily driven by your credit profile or affordability. Because there are no monthly repayments on most lifetime mortgages, the risk of default is fundamentally different, making bad credit far less of a barrier than it would be for a conventional mortgage.
Equity release lenders are considerably more lenient on credit history than high street lenders. Rather than placing heavy emphasis on your credit score, they focus mainly on your age, health, and the value and condition of your property.
That said, a credit check is still carried out as part of the application process, and you must be transparent about any issues in your history. It’s also worth knowing that taking out equity release itself will not negatively affect your credit score, since there is no requirement to make monthly payments, there is nothing to miss. A very low credit score, active bankruptcy or IVA may still mean that a lender declines your request for equity release. bamkruptcy
How long does equity release take?
Once you decide to proceed, you’ll naturally want to know how long the process will take. Equity release typically takes between 6 and 8 weeks from application to completion, though this can vary depending on your individual circumstances. Your lender will need you to take Independent Legal Advice before releasing any funds, so you should factor this into your timescales.
What can cause delays to equity release?
Several factors can extend the timeline:
- Property valuation issues: Structural problems or difficult-to-access properties take longer to assess
- Legal complications: Title restrictions, lease issues, or ownership changes all add complexity
- Incomplete documentation: Providing all required paperwork promptly at every stage helps significantly
- Time of year: Holiday periods can slow down solicitors, surveyors, and lenders
For a further advance on an existing equity release plan, the process can be significantly quicker, sometimes completed in under a month.
What to do if you’ve been refused equity release
Being refused by one lender is not the end of the road. Every lender applies its own criteria, and some are considerably more flexible than others when it comes to property type, construction, location, or credit history.
If you’ve received a refusal, the next right step is to speak with a mortgage adviser who specialises in later life lending. They can identify which lenders are most likely to be suitable for your circumstances, help you understand why you were declined, and match your situation to specialist lenders who may take a different view.
In some cases, addressing a property issue (such as completing repairs or extending a lease) before reapplying may significantly improve your chances. Your adviser can help you assess the most practical route forward.
Speak to Key Solutions about equity release
Whether you’re just starting to explore your options or you’ve already been refused by a lender, speaking to a specialist mortgage adviser is the single most important step you can take. With access to the whole of the equity release market, an experienced adviser can find the most suitable product for your circumstances, and help you avoid unnecessary applications that could harm your credit file.
Get in touch today for a no-obligation initial conversation about your equity release options.