Understanding equity in a mortgage can make a big difference to your financial planning, especially in later life.

Equity is the portion of your home you truly own, and over time, it can become one of your most valuable assets.

How Do You Work Out Your Equity?

To calculate your equity, you subtract your remaining mortgage balance from your property’s current market value.

So if your home in Hull is worth £220,000 and you owe £120,000 on your mortgage, your equity is £100,000.

This amount will grow over time as you pay down your mortgage or as the value of your property rises.

How Does Equity Grow Over Time?

Each monthly payment you make reduces your mortgage balance, increasing your equity.

If house prices go up in Hull, your home becomes more valuable, which further boosts the amount of equity you hold.

On the flip side, if property prices fall or you borrow more against your home, your equity can drop.

Why Equity Matters in Later Life

Many people look at equity in a mortgage in Hull as a way to support their plans in retirement.

Whether you’re looking to improve your home, support loved ones, or just enjoy more freedom in your later years, unlocking this value could offer a practical solution.

Having more equity may also open up better mortgage deals, especially if you’re considering remortgaging or downsizing.

What Can You Do With Your Equity?

If you’re still working and have a good credit profile, you could remortgage in Hull to borrow more against your increased equity. This is often used to fund renovations, clear debts, or make a large purchase.

You might also consider a further advance, which is an additional loan from your existing lender. This keeps your main mortgage in place while giving you access to extra funds.

If you’re aged 55 or over, equity release in Hull is another option. The most popular form is a lifetime mortgage, which allows you to access tax-free cash from your home without the need to move or make regular payments. The loan is usually repaid later, when the home is sold.

How Does Equity Release Affect Inheritance?

One thing to consider is how equity release impacts what you leave behind. If you take out a lifetime mortgage in Hull and don’t make repayments, interest builds up over time.

This reduces the equity left in your home and, in turn, the value of your property. Some products offer features like inheritance protection to help preserve a portion of your home’s value for your family.

Date Last Edited: 06/03/2025