How much does equity release cost?

If you’re wondering whether equity release could be the right option for you, it’s important to know more about the costs involved. Much like you’d find with a regular mortgage, there are different fees to be aware of. From initial costs in the short-term to interest rates over the longer term, it can be difficult to be sure just how much equity release costs. But that’s where we can help.

By getting in touch with The Equity Release Experts, everything will be explained to you in clear and simple terms. The initial chat is free – so phone 0800 188 4812 or request a callback now.


How much equity can you release from your home?

For homeowners aged 55 and over, equity release could be the most effective way to boost your finances in later life. It could be possible to borrow up to 56% of what your home is worth. But the amount of equity you could unlock from your home will depend on factors such as your health & lifestyle, value of the property and your age (youngest age if joint application).

Why not use our equity release calculator to see how much you could potentially release?

As we’re now living longer in the UK, the amount of equity you release now could affect how much it costs in the long run. So, that’s why it’s important to know what equity release means for you.


Initial costs: How much will it cost you to release equity?

If you’re asking, “how much does equity release cost?”, we appreciate that your first thoughts will be about the here and now. After all, knowing all the upfront charges involved play a big part in making sure it’s the right option at the right time.

Like taking out a regular mortgage, there are different things that can affect the total initial cost. Here at The Equity Release Experts, we estimate the total initial cost to be around £1,850. But it won’t be the same for everyone. Here are the fees and services you need to think about:

Surveyor’s valuation

To take out equity release, the provider will instruct an independent surveyor to conduct a survey/valuation on your property. This valuation is then sent to the lender.

Solicitors’ fees

If you’re happy to proceed with the lender’s offer, the next step is to instruct your own independent solicitor. We can provide you with a list of of panel solicitors who are specialists in this field, they are impartial equity release solicitors who look after all the legal matters for you. Of course, you are welcome to choose your own if you prefer.

There's not a set cost for this service, as each individual service the solicitor provides will be dependent on other potential legal matters that could apply - but we find that it typically costs around £1,250.

Application fees

While it’s not always the case, a lender may charge “application” or “administration” fees – much like a regular mortgage. It typically covers the set-up and legal costs of arranging your plan. They vary from lender to lender, so could be anything between being free of charge and £695.


Equity release advice

The Equity Release Experts’ service is completely free of charge, as our advice fee of £1,499 is only payable on completion of a plan. You must seek specialist equity release advice before unlocking tax-free cash from the value of your home it is a regulatory requirement. Otherwise, your application won’t be accepted.

As The Equity Release Experts, we pride ourselves on getting to know you and your circumstances better. Then we can be sure what we recommend is truly right for you.


Paying your equity release fees

The initial fees described above will cover the entire process of taking out an equity release plan. But you won’t necessarily pay everything in one go. Here are the differences in when you pay:

  • Surveyor’s valuation: If this is applicable, you will pay the fee at the same time as you make your application (if applicable)

  • Solicitors’ fees: Your solicitor will generally deduct their fee from your tax free cash release amount on completion

  • Lender’s application: At the start of your plan when you receive your tax-free cash

Your initial consultation is completely free of charge – so call us now on 0800 188 4812 or request a callback to see if you could unlock some of the value in your home.


How much interest do you pay on equity release?

After the initial fees and charges, the next thing to be remember is how much interest is paid on your equity release. The Equity Release Council’s 2020 Spring Market Report found that average rates were at a low of 4.48% in the second half of 2019.

At The Equity Release Experts, We have annual interest rates starting from as low as 4.45% - fixed for life*. The overall cost for comparison is 4.62 % APR.
*Stated rates correct as of 8 July 2022. The actual rate that you receive will depend on your circumstances.

Knowing the effect of compound interest

If you take out a lifetime mortgage, the most popular form of equity release and take the maximum tax-free cash in your home as a single lump sum, the interest is rolled up each week, month or year (depending on your plan). It’s also known as compound interest (interest on interest) and means the amount you owe on your plan will grow each year.

At the end of the first period, the interest rolls up and is added to the original loan amount. At the end of the next period, that interest is ‘compounded’ and is charged on the total amount owed – the initial loan and the first period’s interest. It then continues like this for the duration of the plan.


Keeping the cost down by paying the interest

In some cases, you may be able to apply for a lifetime mortgage plan where you make monthly repayments, your adviser would need to find a plan that allowed you to do so. This means you’ll essentially be paying off the interest applied at the end of every month or year. By doing this, you could keep the cost of equity release down in the long run.

If this is an option available to you, our specialist equity release advisers will be sure to let you know.


Taking the next steps

Are you thinking about equity release? Before you decide, you must first get expert advice – and that’s where we come in. Not only is it a regulatory requirement, but it means we can make sure you know exactly what it means for you and how much equity release will cost.


Our expert equity release advisers will make tailored recommendations based on your needs, current situation and future aspirations. And it all starts with a consultation that won’t cost you a penny. Get in touch on 0800 188 4812. Lines are open Monday-Friday 9am-5.30pm. Or why not request a callback to see what equity release could do for you?


Things to consider with equity release

  • A lifetime mortgage is a loan secured against your home.

  • Typically there are no monthly repayments to make as the loan plus roll up interest is repaid when the plan comes to an end.

  • You should always think carefully before securing a loan against your home.  

  • Equity release will reduce the value of your estate and may affect your entitlement to means tested benefits.

  • Unless you decide to go ahead with a plan, our service is completely free of charge, as our fixed advice fee of £1,499 is only payable on completion of a plan.