What is the equity release solicitor cost & process?
- You can release equity from your existing home or a home you plan on buying.
- You can release equity and still live in your home.
- You need specialist lifetime mortgage solicitors and financial advisor to explain the risks and process.
- Equity release is available to anyone over 55 with a home worth over £70,000.
- You can spend the tax free money on whatever you like, and there are no monthly repayments.
- Equity release cost to set up is, on average, £3,000.
- An equity release plan can take up to 8 weeks to complete.
- The interest rate is fixed when you take out the loan.
Equity release helps people over 55 take equity out of their property without selling their home. Unlike a standard mortgage, you don't pay monthly repayments; the loan is paid off when you sell, although you can pay it off earlier.
The criteria for getting an equity release loan are:
- You are a property owner in the UK (not the Isle of Man or Channel Islands).
- The property is worth £75,000 or more.
- You want to release a minimum of £15,000.
The Leasehold and Freehold Reform Act 2024 was passed on the 24th May 2024, but is not yet in effect and the date for this is not yet clear. We will update our content as and when the finalised legislation is published. Read more - Expected changes
The equity release lender will provide you with money that accrues interest on it until it is repaid, normally when you die or the property is sold because you go into a care home. The interest rate is usually fixed for the life of the loan.
Equity release isn't always the most affordable way to get equity from your home when compared to the rates of a normal mortgage or bank loan. There can often be disputes from the beneficiaries of your estate because the amount they get left is drastically lower because of the interest applied to the loan.
What does an Equity Release Conveyancing Solicitor do?
There are 2 solicitors involved when you get an equity release mortgage: a solicitor who acts for the provider and a solicitor specialising in equity release who acts for the homeowner. They must be separate solicitors to avoid any conflict of interest.
Provider's Solicitor. Their role is to check the property's title, check the homeowner's eligibility and register a first charge over the legal title of the property.
Homeowner's Solicitor. Their role is to ensure the homeowner is fully aware of the terms/legal obligation of the lifetime mortgage, risks/benefits and that no undue influence is applied. On completion, the provider's solicitor sends the money to the homeowner's solicitor, who in turn sends the money to the homeowner.
The homeowner should choose solicitors specialising in equity release because of the costs and risks involved. We have a panel of qualified solicitors who specialise in equity release and provide a fixed fee quote. Call to find out more on 0333 344 3234 or click to get a quote.
Get an Equity Release Solicitor Quote
What is the Equity Release Process?
- 1
Speak to an Equity Release lender
There are two types of equity release products:
- Lifetime Mortgage. This is the most common way to release equity as you register the loan on your property and remain the legal owner. The term “lifetime” refers to the fact this is a special kind of mortgage designed to run for the rest of a person’s life, or until the person goes into long-term care, whichever is the sooner.
- Reversionary release. In a home reversion you sell your property under value and lease it back, rent-free, so you can live in it for the rest of your life.
Not all mortgage lenders provide equity release loans because of the complicated nature of the arrangement. You need to choose a lender and speak to their financial advisor. Here are some of the top providers and links to their websites:
- 2
Apply for an equity release loan
Once you've decided who to use, you can formally apply for a lifetime mortgage. You'll do this through a financial advisor who will explain the rates and cost of equity release in detail.
You can apply in your sole name or joint names with your partner. If the property is in your sole name and you are applying in joint names, you will need to add their name to the legal title with a transfer of equity.
- 3
Property valuation
A Royal Institution of Chartered Surveyors values your property to confirm its current market value. The RICS valuer will undertake either a:
- a physical valuation where a RICS surveyor inspects your property's internal and external parts. This is done to confirm the property's current condition; or
- a desktop valuation, which doesn't require a RICS surveyor to inspect your property.
The surveyor reviews local comparable properties to support their opinion of your property's value. If you're not sure what the value of your property is, then you can get an indication from Zoopla. You can also use our free online tool to value your home.
Valuation fees vary depending on the provider, and you must use the provider's RICS valuer.
- 4
Mortgage offer
If the provider confirms your application and your valuation is correct, they will issue you a lifetime mortgage offer. You must check your home insurance is up to date and in place to the value of your equity release value.
- 5
Obtain legal advice
You need legal advice from an equity release solicitor to advise you about the lifetime mortgage you are entering into. The meeting must be face-to-face; however, some providers allow this via video conference. This avoids the need to choose an equity release solicitor near you.
The solicitor will conduct ID checks to confirm who you are, have a meeting to discuss the offer and provide a report confirming what was discussed, including a certificate of independent legal advice.
- 6
Completion
The equity release provider sends your solicitor the money, and they will send this on to you. The solicitor who acts for the equity release company registers a charge over the title of your property, stopping you from being able to sell without the equity loan being repaid.
Do I need an equity release solicitor near me?
Most equity release providers allow you to work with any equity release solicitor as long as they can provide a face-to-face meeting over video conference. Some providers require you to see your solicitor in person, which means either you are attending their office or they visit you at home. It often costs more to have a solicitor near you that you have to visit.
What are the equity release fees for the solicitor?
Equity Release Cost | Advice Fees (£) |
Solicitor Fee
| £1,399 INC VAT |
Online ID Check | £15 INC VAT |
Official copy of the title To check who the legal owners are and if there are any other charges or restrictions. | £6 INC VAT |
What about the other equity release costs?
The other equity release costs vary depending on your specific provider. These are the costs to look out for:
Equity Release Cost (£) | |
Arrangement Fee This is paid to the provider and will vary depending on your chosen provider. It'll either be a fixed fee or a percentage of the loan amount. | £500 to £1200 INC VAT |
Financial Advice Fee Some providers charge a fee for their financial advisor to discuss the product with you. | £700 to £3,000 INC VAT |
Valuation Fee You may be required to pay for the RICS valuar to value your property. The cost depends on the value of the property and whether the surveyor attends the property or complex a desktop valuation. | £240 to £600 INC VAT |
Equity Release Interest The typical annual interest rate on an equity release is higher than the bank of interest base rate, which is currently 4.75%. The interest is charged annually and is compound interest. This means you pay interest on the interest added on top of the equity loan. For example:
The interest rate is normally fixed when you take the loan out. | 5.5% to 7.5% |
How long does equity release take?
It takes 8 weeks from application to you receiving the money. The longest part of the process is normally waiting for the lifetime mortgage solicitor to draft the necessary paperwork for you and to register at the Land Registry. It can take a further few months before the Land Registry is updated with a charge on your property.
Equity Release Plan Example
Here is an example of how much an equity release costs over 20 years on £100,000 with an equity interest rate of 6%:
- A loan of £100,000
- Interest rate 6%
- Property value £300,000
- Total interest payable £220,713
- Total repayable on sale £320,713
The costs involved over the lifetime of the mortgage are considerable and should be considered very carefully.
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
