What Equity Release Costs can you expect?

Equity release can be quite daunting when considering it. Not knowing how much equity release costs can really put people off. In this article we talk about the costs you can expect to pay.

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What are the usual Equity release costs I can expect?

Lifetime mortgages are the most common type of Equity release, and the Equity release fees associated with Lifetime mortgages are quite similar to regular mortgages. Therefore you can expect:

  • Arrangement fees
  • Solicitors fees
  • Broker fees
  • Valuation fees
  • Potential smaller fees associated with a lender

I’ll explain all you need to know about fast equity release so you can determine whether it’s a good choice for you.

equity release costs, Equity Release Costs, Albion Forest Mortgages
equity release costs, Equity Release Costs, Albion Forest Mortgages

Arrangement fees

Arrangement fees are charged by the lender, and range from a few hundred pound, up to around £1,500. A typical Arrangement Equity release fee would be around £599.

Whilst arrangement fees tend to be the bulk of a lenders fees, there are other fees that may be associated with a lender. Most lenders will charge a small amount, usually of between £10-£50 when your mortgage completes to transfer the money to your solicitor. This is often called a chaps or transfer fee.

Solicitor Equity Release costs

Generally you require your own solicitor for Equity release. This can range from £500-£1000 depending on the solicitor. It could even be more, depending on the value of your home.

How much a solicitor charges is completely up to them, so it will vary a lot from one to another. When using Albion Forest for your Equity release advice we can recommend a good solicitor for you. Reducing your stress and hopefully your equity release costs.

Equity Release Broker fees

You should usually expect to pay your Equity Release advisor a fee. This will vary depending on your case but will usually be between £1,000-£2,250. Equity release is a very complicated area to advise on, and a lot goes in to making sure you get the right product. However, at Albion Forest we tend to charge a flat fee for equity release of £898 for Fast Equity Release.

Valuation fees

If you have ever had a mortgage you will likely at some point had to pay a Valuation fee. The same applies with Equity release. Many products may charge a Valuation fee. This can vary from being free, to several hundred pounds depending on the size of your property.

Other Equity release costs – interest rates

Interest rates tend to be higher on Lifetime mortgages than regular mortgages. This is due to the fact that you don’t tend to pay off the balance of the mortgage. This means the interest tends to be rolled up and added to the balance over time. Therefore a lender is unlikely to get their money back for a while, so they charge a higher rate of interest.

However, if you are older, your interest rate may be lower. Speak to a specialist mortgage broker to discuss your options.

If you are wanting to pay off the liftime mortgage early this could involve paying high early repayment charges, so speak to a professional or your lender before going down this route.

Does a higher Equity release fee mean it is faster?

Higher fees don’t necessarily mean fast equity release. Whilst we charge one of the lowest equity release fees in the market, we pride ourselves on our speed of service.

If you are looking for fast equity release get in touch with one of our Specialist Equity Release Advisors today.

Do Equity release fees change depending on location?

Equity release fees may vary depending on location. For example if you are based in London and looking for a local equity release broker you may find that they charge more. However, we charge a flat rate for our Equity release advice whether you are looking for Equity release in Southampton or Skegness.

Do all Equity release brokers charge a flat fee?

No, whilst we charge a fixed fee for our advice, no matter the size of your home, most advisors do not. Most equity release advisors charge a percentage between 1%-2%. This can therefore mean a fee a lot higher with the majority of equity release brokers. The Equity release council and the financial conduct authority have not put a lower limit on this, therefore a lot will charge more.

Other Equity release brokers may have a minimum fee of £1,500 or more, so even if you are below the percentage they normally charge for financial advice they have a minimum that you will pay. However, if your loan amount is high they will still charge a percentage of that.

Does my age affect the Equity release costs?

Whilst your age will affect the amount you can borrow or the rate of interest you pay it may not affect your broker fees. It will vary depending on the broker you choose. Some will set a equity release fee on a case-by-case basis. However, at Albion Forest we have a fixed equity release fee and therefore you know how much we will charge from day 1.

Other equity release costs may increase depending on your age, for example the rate of interest could be higher as you may have the loan for a longer period of time.

Is it worth using a specialist Equity Release Broker?

Equity release is incredibly complicated. We highly recommend using a specialist Equity release broker offering a bespoke service such as Albion Forest.

Going through a specialist such as us means:

  • You pay a fixed flat rate equity release fee rather than a higher percentage
  • We help arrange everything, including the solicitors to reduce your stress
  • With your permission we include your family in the process to avoid any surprises later on.
  • We offer a discounted Will, or Will update so you know everything is up to date.
  • You deal with 1 person throughout the process, no administrators or second parties fobbing you off.

Got a question regarding Equity Release costs that we haven’t answered? Get in touch to discuss it.

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equity release costs, Equity Release Costs, Albion Forest Mortgages

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