How much does equity release cost?
If you think equity release might be the right solution for you, you’ll need a clear picture of the costs involved.
Some lifetime mortgages (the most popular type of equity release) have arrangement fees to cover set-up and legal costs, while others have none. You'll also need to be fully aware of other fees, such as advice and solicitor fees, as well as interest rates. It’s also worth considering alternatives to equity release, such as downsizing, remortgaging or your existing savings and investments.
Equity release fees
You should bear in mind that costs will vary, depending on your provider. As well as these expenses, you’ll also need to factor in the interest. We’ll go into more detail about the interest rates for different types of lifetime mortgages later.
| Advice Fee | You must receive advice from a fully qualified equity release adviser, who will charge either a fixed fee or a percentage of the amount released for their advice |
| Lender’s application fee | If applicable, this is usually payable when your plan begins |
| Valuation fee | This may be payable depending on your house value and the chosen lender. If required, it’s payable at the time you submit your application and will cover the cost of an independent valuation of your property |
| Solicitor fee | You’ll need to appoint a solicitor to provide you with independent legal advice.
If you use our OneFamily Advice service we can introduce you to our award-winning partners, Equilaw, the recognised leader in this field. They charge a fixed fee of £950* (including VAT) for a standard equity release transaction |
*As at February 2024
Our advice fee
Our qualified, experienced advisers at OneFamily Advice can help you understand the costs associated with any product they recommend. You can have a free, no obligation chat to find out whether equity release could be the right option for you. Then, if you decide to proceed, we charge a single advice fee of £950 on completion - no matter the size of your loan.
Our advisers do not work on commission, and only have your best interests at heart. Have a free chat with us today - call us on 0800 144 8244* or if you’d prefer to request a call back we’ll call you back within 30 minutes.
*Lines are open Monday to Friday 9am to 5.30pm and Saturday 10am to 2pm. Calls may be recorded and monitored for training purposes. Calls to freephone numbers are free from UK landlines and personal mobile phones. With business mobiles the cost will depend on your phone provider. If you'd like to know more, please ask your provider.
How our fees compare
You can see below how our fees compare with other providers.
| Fixed Fee | |
|---|---|
| OneFamily Advice | £950 |
| Equity Release Supermarket | £1,495 |
| TERE - Key Group | £1,799 |
| Age Partnership | £1,895 |
OneFamily Advice and competitor advice fees, as on 23 Febuary 2024.
Some of our competitors use a percentage fee to charge for their advice. The table below shows how typical percentage fees compare to our fixed fee over a range of low, average and higher loans.
| Our Fixed Fee | 1.95% Fee | 2% Fee | 2.25% Fee | |
|---|---|---|---|---|
| £100,000 | £950 | £1,950 | £2,000 | £2,250 |
| £80,000 | £950 | £1,560 | £1,600 | £1,800 |
| £60,000 | £950 | £1,170 | £1,200 | £1,350 |
| £40,000 | £950 | £780 | £800 | £900 |
| £20,000 | £950 | £390 | £400 | £450 |
Find out more about how our fees compare.
What are the interest rates for lifetime mortgages?
The interest you'll pay will depend on the type of lifetime mortgage you choose, and how long it runs for. For example:
- Drawdown lifetime mortgage – you release money from your home as and when you like, rather than taking out a single lump sum. You only pay interest on the cash you’ve released, so these plans can often work out to be more cost-effective as the interest grows at a slower pace. However, you may end up with a series of different interest rates applied to the various withdrawals. The full loan and interest are repaid when your home is sold (when you pass away or move into permanent long-term care).
- Roll-up mortgage – you get a single lump sum, and the interest is ‘compounded’. This means it’s calculated on the sum of the original loan, plus the interest charged in the first month or year. For each month or year that passes, this process continues. The amount owed can grow rapidly, however all lifetime mortgages from Equity Release Council-approved providers offer 'no negative equity' guarantees. This means the amount to be repaid will never exceed the value of your home. The full loan and interest are repaid when your home is sold (when you pass away or move into permanent long-term care).
- Interest-only lifetime mortgage – you have the option to pay the interest monthly. You can also choose your contribution amount, so you pay only part of the interest. If you can’t afford to pay the interest or decide to stop paying it, the loan converts to a roll-up lifetime mortgage.
Finding the best equity release interest rate is important, because the higher the rate the more you will owe in future (if you don’t make any optional repayments). At OneFamily Advice, we search the whole lifetime mortgage market to find the best value product that suits your needs.
What is the total cost of equity release?
So you're aware of the different costs and fees you'll need to consider. But how much can you expect to pay in total?
According to Money Saving Expert, the charges for taking out equity release can total between £1,500 and £3,000^.
It’s impossible to offer a more precise upfront estimate because there are so many variable factors at work – for example different lenders charge different application fees. Some lenders even offer cashback deals that will cover the cost of the application fee for you.
^As at 6 December 2023
Other financial considerations
The money you release from your home with a lifetime mortgage can affect your entitlement to means-tested state benefits. A lifetime mortgage will also reduce the amount of inheritance you'll leave behind.
To take out equity release you'll need to speak with an equity release adviser. They'll talk you through your options, and will help you to find the right solution for your circumstances.
Try our equity release calculator
Find out how much equity you could release by entering your details below.
Maximum loan amount:
By providing your details you are giving us consent to contact you with equity release information. Read the OneFamily Privacy Notice.
Important: The loan amounts above are an illustration of the amount you could borrow. The actual amount may vary depending on your individual circumstances. The figures are not guaranteed and do not constitute an offer to lend. The loan amount will need to pay off any existing mortgage secured against the same property.
Speak to OneFamily Advice today
Talk to us about how a lifetime mortgage works and ask one of our specialist advisers any questions you might have.
In your free initial chat, your adviser will check you meet the basic criteria for a lifetime mortgage. They will then ask some questions to understand your current circumstances, should you wish to proceed.
or call 0800 144 8244*
*Lines are open Monday to Friday 9am to 5.30pm and Saturday 10am to 2pm. Calls may be recorded and monitored for training purposes. Calls to freephone numbers are free from UK landlines and personal mobile phones. With business mobiles the cost will depend on your phone provider. If you'd like to know more, please ask your provider.
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