Is equity release or downsizing cheaper?
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In short: Downsizing is usually cheaper long term because you release equity without compounded loan interest. Equity release lifetime mortgages can double debt every 12–15 years at typical roll-up rates, while downsizing has one-off moving costs but no growing debt.
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Downsizing costs stamp duty, legal fees, agent commission and moving — often £15,000–£30,000 all in — but the released equity is yours outright.
A £100,000 lifetime mortgage at 6% roll-up becomes roughly £200,000 owed in 12 years. House prices would need strong growth to preserve inheritance.
Downsizing also cuts council tax, energy and maintenance. Equity release lets you stay put — rational when health, caring or community ties make moving impractical.
Model both with actual quotes. See equity release alternatives guide.
Primary source: equityreleasecouncil.com
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