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What are the costs involved with an Equity Release/Lifetime Mortgage?

Couple deciding on mortgage

Have you ever considered releasing the equity in your home? It’s a great way to free up extra cash while still retaining 100% ownership of your home until you die or move into long-term care (in the case of a joint application when the survivor passes or moves into long-term care). With more people looking into equity release recently, we thought it best to guide you through any costs you may be concerned about in the process.

How much is the consultation fee with an adviser?

At North East Equity Release, we offer completely free advice and recommendation service. We’ll spend as much time as you need to ensure you understand everything about the process at no cost to you. There is never any obligation to go ahead. You will only pay a fixed fee of £995 if you proceed with an application and this is only payable on completion of the mortgage once your funds are released into your bank account.

Are there any monthly repayments involved?

There is no requirement to make any monthly payments at all, however, you can choose to make voluntary repayments either on a monthly or ad hoc basis to service some or all of the monthly interest which will preserve the equity in your home by preventing the roll-up of the interest and you can also make overpayments to reduce the balance if you wish.

What about interest rates?

The interest rate will be fixed for the lifetime of the mortgage. Currently the average equity release interest rate was reported to be 4% in January 2022. The interest rate for your personal Equity Release/ Lifetime Mortgage will depend on your age and the value of your home at the time of application and how much you wish to borrow.

What is the valuation fee?

Most providers generally carry out the valuation of your property at their own cost, so there is nothing for you to pay to make an application, however if a valuation fee was payable, the fee will depend on the value of your home and your chosen lender and would be payable when you submit your application.

What is the solicitors fee?

Solicitors fees are charges from an independent solicitor who will provide you with legal advice for your equity release mortgage. These fees will vary between solicitor firms, however the current average cost is usually around £1,000 (incl. VAT) to cover their work and is generally payable on completion and can be taken from the funds released if preferred.

Mature couple discussing mortgage

Anything else I should consider?

Remember that with an equity release/ lifetime mortgage, you won’t lose your home. You will retain 100% ownership leaving any unlocked funds available to use towards your later life plans and adventures or to help your children or grandchildren with their own adventures. Some plans can offer different features, so it’s always best to speak to us for free before you decide to go ahead.

We’re independent specialists who can give you access to plans from the whole equity release market, and encourage you to involve family members in your meetings with us. We’re also authorised by the Financial Conduct Authority and we’re a member of the Equity Release Council, so you can trust us to give you the best advice you deserve.

Get in touch with us today to discuss your options for an equity release mortgage.