The following costs could be applied during an equity release application
When people take out any new financial services product such as equity release, they often face a few unfamiliar terms and definitions. Firms sometimes uses slightly different language, which makes it hard for consumers to compare costs.
The Equity Release Council has produced the following standardised terms and definitions so consumers can understand them in the first place and more easily compare the costs between firms. The Council is encouraging all of its members and the wider equity release industry to use these terms and definitions, but it is not mandatory. So people might see some other terms and definitions.
It is extremely unlikely that all of these fees and charges would be applied to one equity release case, but they below for completeness. Competition law prevents the Council, or any other body, from fixing fees and charges at a particular rate, so consumers will have to check with each firm.
Anyone who wants to find out more can find a qualified and regulated equity release adviser here: www.equityreleasecouncil.com/find-a-member/advisers/ Most (if not all) advisers will be happy to have a preliminary no-obligation chat.
Fee or charge that may be payable on or before completion of your mortgage or further advance.
| Type of fee/charge | Description of the fee/charge |
| Advice fee | Covers the adviser’s costs for providing advice relating to your lifetime mortgage. This fee will vary depending on your chosen adviser. |
| Arrangement fee | Covers the lender’s costs for setting up your lifetime mortgage. |
| Funds transfer fee | Covers the lender’s costs for transferring the mortgage funds to you or your solicitor. |
| Legal fee | Covers the independent solicitor’s costs for providing legal advice in relation to your lifetime mortgage. This fee will vary depending on your chosen legal adviser. |
| Valuation fee | Covers the lender’s costs for valuing the property. The valuation is for the lender’s purposes only. |
Fee or charge that may be payable if you alter your mortgage or your circumstances change.
| Type of fee/charge | Description of the fee/charge |
| Early repayment charge on part repaying your mortgage | You may have to pay this charge if you overpay more than your mortgage terms allow (if you make an overpayment higher than your agreed product limit) or you repay the mortgage early. |
| Additional borrowing arrangement fee | Covers the lender’s costs for providing an additional mortgage or redemption statement. |
| Change of ownership fee | Covers the lender’s administration costs when adding or removing someone from the mortgage. |
| Consent to let fee | Covers the lender’s costs where permission has been given to let the property or part of the property. |
| Insurance arrangement fee | You must insure your property against loss or damage. If you don’t the lender might need to insure it for you. This fee covers the costs of arranging this insurance, if this is necessary. |
| Lease extension fee | Covers the lender’s costs of administering an extension to the lease, in the event that this is necessary. |
| Moving home arrangement fee | Covers the lender’s costs in the event of transferring your lifetime mortgage to a new property. |
| Part sale of land fee | Covers the lender’s administration costs if you wish to remove part of the property or land from the mortgage. |
| Specialist report fee | Covers the lender’s costs in the event that a property specialist report is required. |
| Property visit fee | Covers the lender’s costs if a visit is necessary to establish the condition of the property and/or validate occupancy. |
| Reinspection fee | Covers the lender’s costs when a valuer has to make an additional visit to a property. |
| Remote valuation fee | Covers the lender’s costs for a remote valuation of the property. The valuation is for the lender’s purposes only. |
| Repossession charge | Covers the lender’s costs in the event that it has to take possession and sell your property. |
| Revaluation fee | Covers the lender’s costs in the event that a valuer has to revalue your property. The valuation is for the lender’s purposes only. |
| Specialist report fee | Covers the lender’s costs in the event that a property specialist report is required. |
| Unpaid ground rent/ service charges admin fee | Covers the lender’s costs for administration relating to unpaid ground rent or service charges. |
Fee or charge that may be payable at the end of your mortgage.
| Type of fee/charge | Description of the fee/charge |
| Early repayment charge | You may have to pay this charge if you overpay more than your mortgage terms allow, or you repay the mortgage early. |
| Mortgage exit fee | Covers the lender’s administration costs when the mortgage is repaid. |