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Compare the personalised Key Facts Illustrations (KFIs) and offer documents for plans that meet your needs—not headline rates alone. Record the total fees, how interest builds, what repayments are allowed, the maximum early-repayment charge, and the conditions for moving home. These details vary by plan and can affect your finances and family for years. This guide is UK-focused; information was reviewed on 4 October 2026.
Start by comparing the same kind of plan
Equity release usually refers to two different arrangements. A lifetime mortgage is a loan secured on your home. A home reversion plan involves selling all or part of the home to a provider, usually for less than its market value. The figures and trade-offs are different, so an interest rate is not a meaningful way to compare a home reversion plan with a lifetime mortgage.
| Plan type | What to compare |
|---|---|
| Lifetime mortgage | Amount and timing of borrowing, interest rate, whether interest rolls up or is paid, permitted capital repayments, fees, and the projected balance over time. |
| Home reversion | Share of the property sold, payment for that share, residence and occupancy terms, and the share of future property value retained by you or your estate. |
Either type may offer a lump sum, drawdown instalments, or a combination, subject to the product’s terms. For home reversion, get the provider’s valuation and exact offer terms: the general structure alone does not establish how a particular provider values the share or sets occupancy conditions.
Use current personalised documents, not a market-wide headline
Ask for the KFI for each plan under consideration. MoneyHelper says the KFI sets out the provider and plan, product features, fees and overall cost, and—on lifetime mortgages—the interest-rate deal and regular-payment information. It is intended to help you compare similar schemes from different providers. Compare illustrations based on the same borrowing amount and timing, and ask the adviser to explain any item you do not understand.
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No current market-wide equity-release rate figure is established here. Rates, eligibility and terms change, and the rate in a current KFI applies to that recommended plan, not to every available plan. Do not use an old product rate as a present-day benchmark.
Compare fees and when they are charged
Build a complete cost list for each option. Include advice, legal, valuation, lender arrangement and completion charges. For every fee, note whether it is payable upfront, at completion or added to the borrowing. If a fee is added to a roll-up lifetime mortgage, interest may accrue on it too.
MoneyHelper gives £1,500–£3,000 as a broad guide to equity-release application costs, including advice, solicitor, valuation and arrangement charges. Its inspected guidance page did not display a publication date; the range is indicative consumer guidance, not a current quotation or a complete tariff for every plan.
Understand how interest changes the balance
Roll-up interest
With a roll-up lifetime mortgage, interest is added to the loan balance and later interest is calculated on that larger balance. The longer the borrowing remains outstanding, the more time compounding has to increase the amount owed. Compare the KFI’s projected balance at relevant time points, not just its initial rate, and check what assumptions the projection uses.
Interest payments and capital repayments
Some lifetime mortgages allow monthly or one-off interest payments, which can reduce or stop roll-up. Some also permit capital repayments. Compare the permitted amount and frequency, any minimum payment, and the consequences if you stop or miss payments. The KFI and contract should make the plan’s rules clear; do not assume that all products allow the same flexibility.
The FCA has warned that equity release can be expensive where borrowing is needed only for the short term. A lower initial rate does not by itself establish which plan will cost less: amount borrowed, duration, compounding, fees and any payments all matter.
Check early repayment and moving-home terms
Early-repayment charges
Early-repayment charges (ERCs) differ by plan. Some plans have none; others apply them for a defined number of years or throughout the plan. Locate the charge examples, the maximum cash amount, how long the charge can apply, and the circumstances in which no charge is payable. Weigh the potential charge against the other costs and flexibility of the plan.
For lifetime mortgages, FCA MCOB 9 requires the illustration to show cash examples and the maximum ERC as a cash amount, and to explain portability, relevant restrictions or conditions, and circumstances in which no charge is payable. The FCA’s review also reported examples of customers paying ERCs of tens of thousands of pounds a few years after taking loans when circumstances changed. Those were case examples, not an average charge or a prediction of what you would pay.
Moving home or into care
Do not rely on a general statement that a plan is portable. Check the KFI and offer for whether the mortgage can move with you, the conditions and restrictions, and what happens if the new property does not meet the lender’s requirements. Read the plan’s terms for a move into care and for continued occupancy. These conditions can determine whether a move is feasible without repaying the borrowing or triggering a charge.
Verify safeguards and consider effects beyond the loan
Check whether the specific lifetime mortgage includes a no-negative-equity guarantee and read its conditions. MoneyHelper says most lifetime mortgages backed by the Equity Release Council have this protection. Council member standards also describe security of tenure for life or until a move into care, no-negative-equity protection and fixed or capped interest; verify which standards apply to the actual plan rather than assuming every product has identical terms.
Equity release can reduce the equity available to beneficiaries as interest accumulates, and it may affect future plans, care funding or means-tested benefits. Some plans also restrict how the property may be used. The consequences depend on your circumstances and contract, so discuss them with a specialist adviser before deciding.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Use a like-for-like comparison checklist
Fill in one column per current plan document. If a point is unclear or absent, ask the adviser or provider for the relevant term rather than treating it as included.
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| Record for each plan | Questions to answer |
|---|---|
| Plan type and borrowing | Lifetime mortgage or home reversion? How much is released, and as a lump sum, drawdown, or both? |
| Interest and projected balance | What rate appears in the current KFI? Does interest roll up or can it be serviced? What optional repayments are allowed? What balance is illustrated over time? |
| Fees | What are the advice, legal, valuation, arrangement and completion charges? When are they payable, and can any be added to the loan? |
| Repayment flexibility | Are interest or capital payments permitted? What amounts, frequency and conditions apply? What happens if payments stop or are missed? |
| Early repayment | What are the cash examples and maximum charge? How long can it apply, and what exemptions or no-charge circumstances are specified? |
| Moving and occupancy | Can the plan move to another property, and on what conditions? What restrictions and care-related terms apply? |
| Safeguards and personal effects | Is there a no-negative-equity guarantee? What are its conditions? How could the plan affect benefits, care funding, property use or inheritance? |
Compare equity release with alternatives and check the advice
Before proceeding, consider whether another option fits better: downsizing, using savings or investments, or a retirement interest-only mortgage if the monthly interest payments are affordable. An adviser can also discuss other mortgage options. These alternatives have their own costs and eligibility requirements; compare their consequences with the equity-release plan rather than assuming one is automatically preferable.
MoneyHelper recommends specialist equity-release advice. Check that the adviser is FCA-registered, ask whether they search the whole market and which plan types they can advise on, and establish the advice and other fees. The adviser should provide a suitability or product confirmation letter and the KFI. Review these alongside the offer, which sets out items such as fees, the amount you will receive, and special conditions—for example, clearing an existing mortgage. A solicitor reviews the legal details before completion.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
