Can I use equity release to help my child buy a house? 

Equity release mortgages allow homeowners to unlock money from the value of their home. In recent years, they have become more widely used for a range of different reasons. 

With the cost of living remaining high and house prices continuing to present a real challenge for first-time buyers, many parents are looking for ways to support their adult children onto the property ladder.  

For some families, this comes after other options have already been explored. Savings may not stretch far enough, or may already be earmarked for retirement.  As a result, there has been growing interest in equity release as a way of accessing property wealth to help fund a house deposit where other resources are limited. 

The interest in equity release reflects wider trends across the market. The equity release sector continued to grow through 2025, with overall lending increasing by around 11% compared with the previous year. Figures published by the Equity Release Council suggest that in the second quarter of 2025 alone, around £636 million was released from property, up from £578 million in the same period a year earlier. Across the year as a whole, total lending is estimated to have risen from around £2.3 billion in 2024 to approximately £2.57 billion in 2025. 

While this points to equity release becoming a more common feature of later-life financial planning, it remains a technical and potentially high-risk product. It is not suitable for everyone, and anyone considering this route should take specialist advice. 

Why are equity release mortgages gaining popularity? 

Equity release mortgages were once most commonly associated with topping up retirement income or meeting later-life expenses. That is still the case for many people. However, they are increasingly being used as part of wider financial planning, including to support family members. 

Research suggests that more than half of UK homeowners with adult children have already helped, or expect to help, their children financially to buy a home. In practice, this often reflects concern that without support, their children may struggle to buy at all. 

Many parents do not have sufficient savings available to provide this help outright. For those homeowners, equity release, sometimes referred to as a lifetime mortgage, can appear to offer a way of unlocking value tied up in their property while they continue to live there. 

How does an equity release mortgage work when helping a child buy a home? 

An equity release mortgage allows homeowners aged 55 or over to access money from the value of their home without having to sell it. The funds released can then be gifted, or in some cases loaned, to a child to help with a deposit or purchase costs. 

There are different types of equity release products and different ways of taking the money. Some people take a lump sum, while others draw down smaller amounts over time. Where equity release is chosen, the amount borrowed, together with any interest that builds up, is usually repaid when the property is sold following death or a move into long-term care. 

Some products allow for voluntary repayments during your lifetime, which can help manage the overall cost of borrowing. However, this is often optional rather than required. 

Most modern equity release mortgages include a no negative equity guarantee. This means that the homeowner, or their estate, will never have to repay more than the value of the property when it is sold, even if interest has increased significantly over time. 

Although equity release can provide a way of helping a child onto the property ladder, it is important to understand that the decision can affect the borrower’s finances for many years to come. 

Is an equity release mortgage right for me? 

For many parents, being able to help their children financially is a strong motivation. However, equity release should always be considered carefully and in the context of the borrower’s wider circumstances. 

One of the main consequences is that it reduces the value of the borrower’s estate. This can be particularly important where one child receives financial support and others do not. These situations can be sensitive, and expectations are often best managed through early discussion and planning. 

Inheritance tax may also need to be considered. Although gifts of up to £3,000 per tax year can usually be made without inheritance tax implications, larger sums may be taken into account if death occurs within seven years of the gift. How equity release and gifting interact with estate planning will depend on individual circumstances. 

If a child is married or in a long-term relationship, there is also the possibility that money provided towards a property could be lost or shared if the relationship breaks down. In practice, this is something that can often be addressed, but it needs to be considered early. Depending on the situation, the contribution may be documented as a loan rather than a gift, or protected through a declaration of trust when the property is purchased. 

Equity release can also affect the borrower’s broader financial position. It may have implications for tax, for any means-tested benefits received, and for how local authorities assess contributions towards residential or nursing care fees. 

It is also worth bearing in mind that while it may be possible to move or downsize after taking out an equity release mortgage, this will usually require the lender’s consent. If the new property does not meet their criteria, the existing loan may need to be repaid, potentially incurring early repayment charges. Securing alternative borrowing later in life can be difficult. 

Next steps 

Equity release mortgages are complex products with long-term implications, both for you and for your family. Deciding whether this option is right will depend on your individual circumstances and on how your needs may change over time. 

The Equity Release Council is the industry body for the UK equity release sector, of which Coodes is a member. Our specialist team of residential property lawyers can provide advice tailored to your situation and help you understand the legal implications of an equity release mortgage.