What is the Downsize vs Equity Release vs RIO Calculator?
Your home might be one of your biggest assets in retirement. The difficult bit is working out how, or whether, you want to use some of that value.
This calculator compares three routes: selling and buying somewhere cheaper, taking a lifetime mortgage through equity release, or using a Retirement Interest-Only (RIO) mortgage.
It puts the three side by side so you can compare the cash you could release now, any monthly interest, how the debt could change and how much of the home’s value might remain later.
How the Calculator Works?
Enter your home’s value, any mortgage still outstanding and how much cash you would like to release.
The calculator then compares downsizing with two ways of borrowing against the home. You can change the assumptions for interest rates, costs and house-price growth to see how the comparison changes.
It is designed to help you understand the trade-offs and ask better questions before speaking to an adviser. It does not decide which option is right for you.
Step 1: Add Your Home and Cash Need
Enter your home’s value, outstanding mortgage and how much cash you would like to release.
Step 2: Add Your Retirement Priorities
Tell us whether you would consider moving, whether monthly RIO interest looks affordable and how important leaving housing wealth behind is to you.
Step 3: Compare the Three Routes
Compare cash released, monthly interest, debt later and the estimated value remaining in the property.
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Disclaimer: This calculator provides illustrative planning figures only. It is not financial, mortgage, tax or legal advice and does not provide a mortgage offer, property valuation or eligibility decision.
Lifetime mortgages and RIO mortgages are regulated products. Actual borrowing limits, interest rates, affordability requirements, fees and product features will depend on the lender and your circumstances.
The calculator does not provide a full Stamp Duty calculation, Early Repayment Charge calculation, benefits assessment, care-fee assessment, underwriting decision or home reversion comparison. Downsizing can also affect running costs, maintenance, location and lifestyle in ways that are not scored here.
Any fit labels or highlighted figures are financial illustrations only. They are not recommendations.
Speak to an appropriately regulated adviser before taking out a later-life mortgage or equity-release product.
What the three routes are actually showing you
The biggest cash figure is not automatically the most attractive result. Each route gets money out of your home in a different way. Look at what you receive now, what it costs along the way and what could remain later.
Cash Now
This is the amount each route could release after the costs and existing mortgage included in the model.
If you entered a specific cash need, also check whether each route actually reaches it.
Monthly Interest
This is particularly important when comparing a RIO mortgage with a roll-up lifetime mortgage.
In this model, the RIO interest is paid each month. The lifetime mortgage does not have a monthly interest bill because the interest is added to the debt instead.
Debt at the End of the Period
This shows the modelled mortgage balance at the end of the planning period you selected.
With the RIO route, paying the interest each month means the capital balance stays much flatter in this model.
With the lifetime mortgage, rolled-up interest means the balance can grow considerably over a long period.
Estate Left
This is the estimated value of the home at the end of your chosen period, less the mortgage debt shown by the calculator.
It helps show how the different borrowing routes could affect the housing wealth left behind.
Total Interest
Look beyond the interest rate itself and check how much interest builds up over your chosen period.
This matters particularly with a roll-up lifetime mortgage because interest can be charged on earlier interest as the debt grows.
LTV
LTV means loan-to-value. It is simply the mortgage amount compared with the value of the home.
A £100,000 mortgage against a £400,000 property is a 25% LTV.
The calculator uses editable LTV assumptions for illustration. They are not lending offers or eligibility limits.
Focus and Fit Labels
The focus buttons change which part of the comparison gets more attention. You can look at cash now, staying in your home, the estate left later or a more balanced view.
The Better, Mixed and Weaker labels are simple financial heuristics based on the information you enter. They are not recommendations about which route you should take.
The Biggest Difference Might Not Be Financial
Downsizing can release cash without taking on a new later-life mortgage, but it means selling your home and moving.
A lifetime mortgage can allow you to stay without servicing monthly interest in this model, but the debt can grow as interest rolls up.
A RIO can keep the mortgage balance much flatter, but you need to make the monthly interest payments and satisfy a lender’s affordability requirements.
Three Ways Housing Wealth Could Be Used
The same house can produce very different results depending on whether you are prepared to move, need to avoid another monthly bill or care strongly about how much housing wealth remains later.
These examples show the sort of trade-off the calculator is designed to bring out.
Same house, very different priorities
The numbers matter, but so does what you are trying to achieve. These examples show why looking only at the amount of cash released can miss half the decision.
David, who wants to stay in his home
David wants £60,000 for home improvements, a newer car and some extra retirement spending. He has lived in the same house for more than 30 years and really does not want to move.
That makes the downsizing numbers useful as a comparison, but the two stay-put routes are particularly relevant to the decision he is actually facing.
A lifetime mortgage avoids the modelled monthly interest payment but allows interest to build into the debt. A RIO services the interest monthly, so David can see what that payment could mean for the debt and housing wealth left later.
Helen and Richard, who would consider moving
Their children have left home and they no longer need as much space. They are considering a smaller £400,000 property and want to understand whether borrowing against the existing house makes sense when moving is genuinely on the table.
They also care about leaving something behind, so the estate-left figure matters alongside the cash released.
Downsizing releases housing wealth without leaving a new later-life mortgage on the property, but selling, buying and moving all have costs. They can compare that with staying put and carrying either a RIO or lifetime-mortgage balance.
Priya, testing what borrowing might look like at a younger age
Priya is younger than the other examples and still has an existing mortgage. She wants to see whether freeing another £80,000 looks realistic under the calculator’s assumptions.
Her age matters because the lifetime-mortgage borrowing illustration uses age when estimating the available loan-to-value.
She can see whether each illustrative route reaches her £80,000 target and what assumptions sit behind it. The calculator cannot tell her whether a lender would actually offer that amount.
What is the Downsize vs Equity Release vs RIO Calculator?
The calculator compares three ways of accessing wealth tied up in your home: moving to a cheaper property, using a lifetime mortgage, or taking a Retirement Interest-Only mortgage.
It compares cash released, monthly interest, debt later and estimated housing wealth remaining. It is a planning tool, not a mortgage recommendation or lender quote.
What is downsizing?
Downsizing usually means selling your existing home and buying a cheaper one.
After paying off any existing mortgage and allowing for selling, buying and moving costs, the difference can potentially be released as cash.
There can be other reasons for downsizing too, such as lower bills, less maintenance or moving closer to family. The calculator does not try to put a financial score on those benefits.
What is equity release?
Equity release is a way for eligible homeowners to access some of the value tied up in their home without necessarily selling it.
There are different types of equity release. This calculator models a lifetime mortgage, which is the most common form, rather than a home reversion plan.
What is a lifetime mortgage?
A lifetime mortgage is a loan secured against your home.
You continue to own and live in the property. With a roll-up lifetime mortgage, you do not normally have to make monthly interest payments. Instead, unpaid interest is added to the loan.
The loan and accumulated interest are usually repaid when the property is eventually sold following a specified event such as the last borrower dying or moving permanently into long-term care.
What does rolled-up interest mean?
It means the interest is added to what you owe rather than being paid each month.
Future interest can then be charged on the original borrowing and the interest already added.
That compounding is why a lifetime-mortgage balance can grow considerably over a long period.
What is a RIO mortgage?
RIO stands for Retirement Interest-Only.
You borrow against your home and normally pay the interest each month. The original loan balance therefore stays broadly unchanged if all required interest payments are made and no other charges or borrowing are added.
The capital is generally repaid later, often when the property is sold following a specified life event.
What is the biggest difference between a RIO and a lifetime mortgage?
The treatment of interest is one of the biggest differences.
With the RIO model used here, you pay the interest each month.
With the roll-up lifetime mortgage, the calculator adds the interest to the debt.
That can make a big difference to both your monthly spending and the amount owed later.
Do I need enough retirement income to get a RIO mortgage?
RIO lenders normally carry out affordability checks because you need to be able to maintain the required monthly interest payments.
The income figure in this calculator helps illustrate that issue. It does not perform a lender’s affordability assessment or tell you whether you would qualify.
What does LTV mean?
LTV means loan-to-value.
It compares the mortgage with the value of the property.
For example, borrowing £100,000 against a £400,000 property gives an LTV of 25%.
The LTV figures in this calculator are editable planning assumptions rather than live lender limits.
Can I take equity release if I already have a mortgage?
Potentially, but an existing mortgage secured against the property will normally need to be dealt with as part of the transaction.
The calculator includes your outstanding mortgage when comparing the amount of cash that might be available.
It does not assess whether a particular lender would accept your circumstances.
What does “estate left” mean in this calculator?
It is an estimate of the home’s value at the end of your chosen planning period minus the mortgage debt shown by the calculator.
It is deliberately narrow.
It does not calculate your full estate, other assets, debts, probate costs, care costs or any potential Inheritance Tax.
Does equity release reduce inheritance?
A lifetime mortgage creates a debt secured against the home, and rolled-up interest can increase that debt over time.
That can reduce the amount of housing wealth remaining compared with owning the same property without the borrowing.
Actual outcomes depend on borrowing, interest, repayments, property values, how long the mortgage runs and the product terms.
What is inheritance protection?
Some lifetime-mortgage products can include features intended to protect a proportion of the property’s eventual value for beneficiaries.
The calculator can illustrate an inheritance-protection percentage, but actual product terms vary.
It is not a guarantee that a particular lender will offer that feature or that a specific amount will ultimately be inherited.
What is a no-negative-equity guarantee?
Many lifetime mortgages that meet Equity Release Council standards include a no-negative-equity guarantee.
Broadly, this is designed so that when the property is sold and the relevant conditions are met, the borrower or estate will not have to repay more than the property’s sale proceeds after the permitted sale costs.
Check the actual product terms rather than assuming every later-life mortgage has the same protection.
Could equity release affect my benefits?
Potentially.
Releasing money from your home can affect entitlement to means-tested benefits depending on your circumstances and what happens to the money.
The calculator only raises this as something to investigate. It does not calculate benefit entitlement.
Could releasing money from my home affect future care costs?
Potentially, but the rules around care funding and capital are more complicated than this calculator models.
The care prompt is there to make sure the issue is not forgotten. It is not a care-fee assessment.
Does the calculator include Stamp Duty when downsizing?
It includes simplified editable buying and selling costs rather than a complete regional property-tax calculation.
Actual Stamp Duty Land Tax, Land and Buildings Transaction Tax or Land Transaction Tax depends on where the property is and your circumstances.
Check the relevant rules before relying on the cost of a move.
Can I use local house prices instead of guessing?
Yes. Open the Local prices panel in the calculator and start typing your council area. Then choose the type of home you have now and the type you would move to. If you would move somewhere else, tick the box and add that area too. Press “Use these prices” and both prices are filled in for you.
The figures are average prices by council area and type of home from the UK House Price Index, published each month by HM Land Registry. The panel shows which month they cover, and they are updated when new figures come out.
They are averages, not a valuation. A well-kept detached house on a popular street can sell for a lot more than the local average, so treat the figure as a starting point and adjust it for your own home.
Is downsizing financially better than equity release?
Not automatically.
Downsizing may release equity without creating another later-life mortgage, but you have to sell your existing home, buy another one and pay the associated costs.
A lifetime mortgage or RIO may allow you to remain in your existing home but introduces borrowing costs and other conditions.
The calculator shows the financial differences rather than deciding which of those trade-offs matters most to you.
Does the route highlighted by the calculator mean it is the best option?
No.
The focus buttons and fit labels are there to help organise the comparison.
A route can lead on cash released or estimated housing wealth remaining without being the most appropriate option for your circumstances.
Is this calculator a mortgage quote?
No.
The rates, LTVs, fees, costs and property growth figures are editable assumptions.
A lender or adviser would need to assess your circumstances and actual products before you knew what was available to you.
Do I need financial advice before taking equity release?
A lifetime mortgage is a regulated financial product and specialist advice forms part of the equity-release process.
This calculator is designed to help you understand the numbers and arrive at that conversation with better questions. It does not replace regulated advice.
Trust and education
Certified Money First Aider®
These calculators are built by a Certified Money First Aider to help you think more clearly about money and time. Money First Aid® is about practical, non-judgemental support for financial wellbeing. The calculators can certainly help you make informed decisions, but they are not regulated financial advice.
Behind Retirement Calculators
Built from the questions I was asking myself
I'm Ryan, the person behind Retirement Calculators. I started the site after selling an online business and trying to understand what our pensions, ISAs, investments and property actually meant for the way we wanted to live.
The calculators are built around those real decisions: whether you could work less, retire earlier, spend more now or use your money differently. They will not give you a perfect answer, but they can make the trade-offs much easier to see.
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