What Is the Limit for Equity Release? How Much You Can Actually Borrow

When you’re retired and own your home, equity release can feel like a lifeline. But how much can you really take out? There’s no single number that applies to everyone. The limit for equity release depends on your age, your home’s value, your health, and the type of plan you choose. Most people assume they can borrow half their home’s value or more-but that’s not always true. In fact, many are surprised to find they can access far less than they expected.

How Equity Release Limits Work

Equity release lets you unlock cash tied up in your home without selling it. The two main types are lifetime mortgages and home reversion plans. In Canada, home reversion is rare. Most people use lifetime mortgages, where you borrow against your home’s value and repay it when you die or move into long-term care.

The lender doesn’t just look at your home’s worth. They also check your age. The older you are, the more you can borrow. Why? Because the lender expects to wait less time before getting repaid. Someone aged 65 might get 25% to 30% of their home’s value. Someone aged 80 could get 40% to 50%. That’s a big difference.

For example, if your home is worth $600,000 and you’re 72, you might qualify for $240,000 to $300,000. But if you’re 67, you might only get $150,000 to $180,000. Age alone can swing your limit by hundreds of thousands of dollars.

Home Value Matters-But Not as Much as You Think

Your home’s value sets the ceiling. But lenders don’t give you the full amount. They cap it based on risk. Most lenders won’t lend more than 60% of your home’s value, even if you’re 90. That’s because they need to protect themselves against falling property prices or living longer than expected.

Also, your home must meet minimum value requirements. Most lenders require your property to be worth at least $75,000 to $100,000. In cities like Toronto or Vancouver, that’s easy. But in smaller towns or if your home needs major repairs, you might not qualify at all.

Location affects value, but not the percentage you can borrow. A $400,000 home in Hamilton gets the same borrowing rate as a $400,000 home in Ottawa-assuming all other factors are equal.

Health and Lifestyle Can Boost Your Limit

Here’s something most people don’t know: if you have certain health conditions, you might qualify for more money. This is called an enhanced or impaired life equity release plan.

Conditions like diabetes, high blood pressure, heart disease, COPD, or even a history of smoking can increase your borrowing limit by 10% to 30%. Why? Because the lender expects a shorter repayment period.

For example, a 70-year-old with type 2 diabetes might get 45% of their home’s value instead of 35%. That could mean an extra $50,000 to $80,000 on a $500,000 home. It’s not a bonus-it’s a reflection of life expectancy. You’re not being punished for your health. You’re being offered a fairer deal based on real data.

Don’t assume you’re not eligible. Even if you’re on medication or had a past heart attack, it’s worth asking. Lenders have access to medical underwriting tools that assess risk far better than you can guess.

Other Factors That Influence Your Limit

Age, home value, and health are the big three-but they’re not the only ones.

• Property type: Semi-detached homes and bungalows are easiest to approve. Large detached homes, luxury condos, or homes with unusual layouts may be harder to value or sell, lowering your limit.
• Existing debt: If you still have a mortgage, the lender will subtract that from your available equity. You can’t release more than what’s left after paying off your current loan.
• Financial situation: Lenders check your income and expenses. If you’re struggling to pay property taxes or insurance, they may reduce your loan to protect you from future hardship.
• Interest rates: Higher rates mean the debt grows faster. To keep your total debt from exceeding your home’s value, lenders lower the initial loan amount.

One common mistake people make is trying to borrow the maximum possible. That can backfire. If you take out too much too soon, you might run out of equity before you need it later-for home repairs, medical care, or assisted living.

What Happens If You Borrow Too Much?

There’s a safety net: the no-negative-equity guarantee. In Canada, all regulated equity release plans include this. It means you or your estate will never owe more than your home’s sale price, even if interest builds up over decades.

But that doesn’t mean you should ignore the long-term impact. Let’s say you borrow $300,000 at age 70. With a 6% annual interest rate, compounded yearly, that debt could grow to $600,000 in 12 years-and $1.2 million in 20 years. If your home only appreciates to $700,000, your heirs get nothing. If it stays at $600,000, they get zero.

That’s why financial advisors often recommend borrowing only what you need. Take out $100,000 now, and leave the rest as a buffer. You can often borrow more later if your situation changes.

How to Find Out Your Exact Limit

You can’t guess your limit. You need a personalized quote. Most lenders offer free, no-obligation assessments. You’ll need:

1. Your full name and date of birth
2. Your home’s current market value (use a recent appraisal or Zolo.ca estimate)
3. Any existing mortgage balance
4. Basic health info (whether you smoke, have chronic conditions, etc.)

Some online calculators give rough estimates, but they’re often inaccurate. They don’t account for health, property type, or lender-specific rules. A real advisor will run your details through underwriting software and give you a range with confidence.

Don’t go to just one lender. Rates and limits vary. One lender might offer 42% for your profile. Another might offer 38%. That 4% difference on a $500,000 home is $20,000. It’s worth shopping around.

What You Can’t Do With Equity Release

Equity release isn’t a magic solution. There are limits-not just in money, but in use.

• You can’t use it to buy a second home or invest in stocks. Most lenders require you to declare how you’ll use the funds.
• You can’t release equity if you’re under 55. The legal minimum age in Canada is 55, but most lenders require you to be at least 60.
• You can’t release equity if your home is in poor condition. Roofs, foundations, and electrical systems must be up to code.
• You can’t release equity if you’re in bankruptcy or have unpaid tax liens.

Some people try to use equity release to pay off credit card debt. That’s risky. Credit card interest might be 20%, but equity release interest is often 6% to 8%. It seems better-until you realize you’re trading short-term debt for long-term debt that grows over time. You might end up owing more than you ever imagined.

Alternatives to Consider

If your equity release limit is too low-or you’re worried about the long-term cost-there are other options:

• Downsizing: Sell your home, buy a smaller one, and pocket the difference. In Toronto, moving from a $900,000 house to a $500,000 condo could give you $350,000 cash.
• Rental income: Rent out a basement suite or spare room. Many seniors earn $1,500 to $2,500/month without selling anything.
• Reverse annuity: Some insurance companies offer products that pay you monthly in exchange for part of your home’s future value.
• Government programs: Ontario’s Guaranteed Annual Income System (GAINS) or federal GIS can top up your retirement income without touching your home.

These alternatives don’t come with compounding interest. They don’t reduce what you leave to your family. They’re often safer-and sometimes more flexible.

Final Thoughts: Know Your Limit Before You Commit

There’s no universal cap on equity release. But there are clear rules that determine how much you can get. Your age, your home’s value, your health, and your lender’s policies all shape your limit. Most people get between 20% and 50% of their home’s value.

The key isn’t to borrow as much as possible. It’s to borrow the right amount-for your needs, your health, and your future. Take time. Get multiple quotes. Talk to a fee-based advisor who doesn’t earn commission from the lender. And always, always ask: What happens if I live to 95?

If you’re thinking about equity release, you’re not alone. Thousands of Canadians do it every year. But the ones who do it right are the ones who understand the limit-not just the number, but what it really means for their life, their family, and their legacy.