The fees and charges you'll pay when setting up a lifetime mortgage (the most popular type of equity release plan) are made up from the three parties involved. These are –
Just as with a residential mortgage, these fees can vary widely and so you could save a lot of money by doing a little research and shopping around. Let’s look at each of these costs in turn.
To take out an equity release plan, you have to have financial advice – it’s part of the regulations enforced by the Financial Conduct Authority (FCA).
Most people prefer to use a broker with its own team of financial advisers, and you should make sure that the broker you choose is impartial, independent and has access to plans from the whole of the equity release market. They should also be members of the Equity Release Council – the industry’s trade body.
Some brokers can be tied to a particular lender, or maybe too small to gain access to special deals. Ideally, you’d want advice from an independent broker with economies of scale who’s able to secure competitive rates, reduced fees or extra incentives. And of course, if you speak to a lender directly, you’ll only have access to their plans, missing out on what the rest of the market has to offer.
You should make sure that the advice fee you’re charged offers good value for money. Why pay more than necessary for financial advice?
Compare Equity Release is part of the Equity Release Supermarket family and we tick all the boxes because we are wholly independent, impartial and because we one are one of the leading brokers in the UK, we have access to the very best deals from across the whole marketplace.
As you can see, our advice fee is also very competitive and significantly lower than the ‘big 2’ equity release brokers. We charge a fixed fee which is guaranteed never to be more than £995, so you’ll always know exactly what you’ll pay - no matter how much money you release.
Plus, we also don’t charge any upfront fees. So, with Equity Release Supermarket, you’ll never pay more than £995 for our advice – which is only payable when your plan completes. Until that point, our advice is free. If for whatever reason your plan doesn’t complete – we won’t charge you anything.
Just as with a residential mortgage, your lender needs to value your property so that they know what the current market value of your home is. With this information the lender can calculate how much money they will release to you. Secondly, a valuation tells the lender if the property is in a suitable condition to lend. If they feel it isn’t, they may decide not to lend at all or insist that repairs are undertaken before they do.
The good news for you is that as the lifetime mortgage market is very competitive with lenders vying for your business. Many offer fee-free plans and will pay for your valuation, or offer other incentives such cashbacks or even pay your standard legal fees.
To find out more about the deals that lenders are currently offering, why not use our ‘compare deals’ tool?Compare deals
Compare Equity Release is part of the Equity Release Supermarket family and so we are members of the equity release industry trade body – The Equity Release Council.
The Council’s strict Code of Conduct insists that you must have at least one face-to-face meeting with an independent solicitor before taking out an equity release plan, to ensure that it is in your best legal interests.
You can choose to appoint your own solicitor - maybe they have dealt with your conveyancing matters before. However, experience has shown this can be the more expensive and a slower option, particularly as they are unlikely to be experts in equity release and know what’s involved.
We recommend that you use one of our specially selected panel of solicitors who will charge you a very competitive fixed fee starting from just £695 plus VAT (plus any additional disbursements). Your Equity Release Supermarket adviser is on hand to arrange this for you.
Using one of our panel solicitors also allows our dedicated case coordinators access to the solicitors online systems we have in place with them. This helps to manage any issues quickly and complete the legal aspects of taking out equity release as efficiently as possible.
Finally, using a solicitor from our panel means that if your plan doesn’t complete for whatever reason, you won’t be charged their legal fee.