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Free equity release guide
Understanding the costs of equity release
Equity release allows homeowners aged 55+ to unlock some of the value in their property. It's important to understand the costs before making a decision if it's right for you.
The total cost of equity release depends on a variety of factors. Here's a breakdown of key equity release costs to consider with a lifetime mortgage, a loan secured against your home:
When setting up an equity release plan, there are several costs to consider, separate from the loan amount itself. These equity release fees vary depending on your provider and the specific plan you choose.
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Surveyor's valuation: A property survey is required as part of the application process. With Key, an independent RICS surveyor will assess your property and provide a valuation for equity release purposes. Their report will be sent to the lender. This fee is typically paid during the application stage.
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Solicitor's fees: A solicitor will handle the legal aspects of the equity release process. This ensures all documentation is in order. The fee usually costs around £1,250, and is generally paid when you receive your tax-free funds upon completion.
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Lender’s arrangement fee: You may be charged an arrangement or administration fee by the lender, which covers setup and legal costs. These fees typically range from £0 to £695, depending on the plan. This fee is usually paid when your plan is complete and funds are released.
Interest is the largest cost associated with equity release.
With a lifetime mortgage, interest builds up over time, and unlike traditional mortgages, you don’t need to make monthly repayments. Instead, the interest accrues, then rolls up and adds to the loan. This is also known as compound interest.
All lifetime mortgages we recommend offer fixed interest rates for life, ensuring the rate remains the same throughout the duration of your plan.
Before taking out equity release, you must receive advice from a qualified equity release adviser. It’s a regulatory requirement.
Our fixed equity release advice fee of £1,699 is only payable upon completion, meaning you won’t be charged if you don't go ahead. This gives you the flexibility to explore your options at no cost, until you’re confident that equity release is the right choice for you.
Equity release is a lifetime commitment and isn't designed to be repaid early, if you do early repayment charges may apply.
Be sure to check the terms of your equity release plan to understand any potential early repayment charges.
ⓘ What's the total set-up cost?
The total average cost of fees when setting up equity release through Key is estimated to be around £3,644. Although not every application will incur the same charges. For example, with some plans, you may pay a lender’s application or survey fee. It's important you speak to an expert equity release adviser to find out what you'll pay before you proceed to release equity.
How to reduce equity release costs?
Reducing the cost of equity release can help you maximise the benefits while minimising the financial impact over time. Here are three effective ways to keep equity release costs down with a lifetime mortgage:
Benefits and drawbacks of equity release
Watch our video to find out more about the benefits and drawbacks of equity release. You can also learn more about the benefits and drawbacks of a lifetime mortgage on Key’s descriptive lifetime mortgage guide.
All our equity release advice relates to lifetime mortgages - a loan secured against your home.
Video transcript (pdf)
Is equity release right for you?
There are different types of equity release which help thousands of UK homeowners take control of their later life finances. Here are some useful links to see if equity release could be right for you:
For more information on your later life options, read our free, comprehensive guide today.
Why choose Key?
Key is a specialist, award-winning later life mortgage provider for the over 55s. We've helped over a million customers see if equity release was right for them. After we take the time to understand your needs, we'll recommend the right later life option for you.
Next steps for releasing equity from your home
It's important to know your other options before going ahead with equity release. These include: downsizing, unsecured lending, using existing assets, or support from friends or family.
Key offers alternatives to equity release such as a retirement interest-only mortgage or retirement repayment mortgage. If another product is more suitable, including home reversion, we'll refer you to a different specialist adviser within Key Group who can help.
If you go ahead, you'll never be charged more than our standard fixed advice fee of £1,699, even if their fee is higher.
All about equity release cost - FAQs
However, depending on how you use the equity you release, there may be tax implications. For more information, read our equity release and tax guide.
There are a range of factors which determine how much you could release. Some of the main ones to consider are:
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Age: The loan amount and interest rate can vary depending on your age. Older borrowers may have access to larger loans and more competitive rates.
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Property value: The value of your property plays a key role in determining how much you can borrow. Higher property values generally allow for larger loan amounts, subject to the Loan-to-Value (LTV) ratio.
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Health and lifestyle: Some providers offer enhanced terms for individuals with certain health conditions or lifestyle factors, which may increase the amount you can release or improve interest rates.
Yes, there are multiple fees involved with equity release. Read our full guide above for more information on the fees involved with equity release.
Feel free to call us on 0808 252 9170 or book a callback with any questions on equity release fees.
Page last updated: Wednesday 09 April 2025