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Equity Release

How much does it cost

The average Equity Release deal is not cheap.

This means that for smaller sums of money, under £20,000 the costs can really eat into the cash paid out.

Here is a list of the common charges and fees. Note that they're average fees and not all of them are applicable.

How much does Equity Release cost
  • Administration fee : £150 - £300 (normally only charged if you decide not to go ahead with the deal)
  • Arrangement fees : £500 - £1,000 (sometimes priced as a percentage of the total loan)
  • Valuation fee : £200 - £500
  • Legal costs : £500 - £1,000
  • General advice : £500 - £1,000

You can see from the above that it is critical to both shop around and consider all charges especially the ones buried in the small print. See Secret 10 - Remember - you're in the driving seat - which is one of this site's 10 Secrets to Good Personal Finance.

Personally, I wouldn't sign any equity release deal unless the provider breaks down every charge in detail for me. I would also visit a number of different providers. Only by doing this can you start to compare like with like.

Be aware of how these charges are paid. When and how will the total amount of charges have to be paid? Often you're given the choice to pay costs upfront or have them added to the overall loan.

If they are added to the total loan the amount will be paid over several years with interest charged on top. So where possible it's always better to pay the fees up front but this many be impossible for some people.

See also

FREE Equity Release Guide

  • This LearnMoney guide offers a simple 5 Step process outlining exactly how to properly research the Equity Release market

  • It make sure you ask the right questions and get proper answers

  • Concentrates on the all-important costs and flexibility of the different Equity Release schemes

  • More details and to download your FREE copy

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