Information, not adviceThis page explains how equity release works in general. It is not a recommendation. Equity release is not right for everyone: an adviser will look at your circumstances, your options and the costs before recommending anything, and you will need independent legal advice before any plan completes.
Lifetime mortgage rates
| Measure | Figure | Date and source |
|---|
| Lowest advertised rate | 6.25% MER, fixed for life | Advertised rates checked 27 September 2026 (Trusted Equity Release) |
| Highest advertised rate | 10.53% MER | Advertised rates checked 27 September 2026 (Trusted Equity Release) |
| Advisers whose customers did not go ahead because rates were too high | 80.6% | Equity Release Council adviser survey, Q3 2026 |
Advertised rates are a starting point, not the rate you will be offered. Your rate depends on the lender, how much you release compared with your home’s value (the higher the percentage, the higher the rate usually is), your age and the features of the plan.
MER and AER
Rates are usually quoted as a monthly equivalent rate (MER). Because interest is added monthly, the annual equivalent rate is a little higher: 6.25% MER is about 6.43% AER.
Fixed or capped
Plans that meet Equity Release Council standards have a rate fixed for life, or a variable rate with a fixed upper limit.
How interest builds up
If you make no repayments, interest is added to the loan and then charged interest itself. This is what £50,000 would grow to.
| Rate | 5 years | 10 years | 15 years | 20 years |
|---|
| 6.25% MER | £68,286 | £93,261 | £127,369 | £173,952 |
| 7.5% MER | £72,665 | £105,603 | £153,473 | £223,041 |
| 8.5% MER | £76,365 | £116,632 | £178,133 | £272,062 |
Illustration only, at a fixed rate with interest added monthly and no repayments. Many plans let you make voluntary repayments, which reduce the amount owed. Plans that meet Equity Release Council standards include a no negative equity guarantee, so the amount repaid will never be more than the value of your home when it is sold.
Things to think aboutEquity release will involve a home reversion plan or a lifetime mortgage, which is secured against your property and will reduce the value of your estate and impact funding long-term care. Equity release requires paying off any existing mortgage. Any money released, plus accrued interest, would be repaid upon death, or moving into long-term care. Releasing equity may affect your entitlement to means-tested benefits.
Set-up costs
Not every plan has every fee, and some lenders pay or waive some of them. Your adviser must tell you their charges, and the plan’s fees, before you go ahead.
| Cost | What it covers | Typical amount | When paid |
|---|
| Advice fee | The adviser’s work looking at your situation and recommending a plan | Varies; some advisers charge no fee | Usually on completion |
| Arrangement fee | The lender’s cost of setting up the plan | Varies; some lenders charge none | Usually on completion, sometimes added to the loan |
| Valuation fee | The lender’s valuation of your home | About £150 to £1,500; some lenders value for free | Usually when you apply |
| Legal fees | Independent legal advice, required before a plan completes | Around £860 for a specialist solicitor | Usually on completion |
Valuation and legal fee figures: Legal & General costs guide, based on June 2026 fees. Fee types: Equity Release Council fees and charges guide. Amounts vary by provider and may include VAT.
Other costs to ask about
Early repayment charges
If you repay the plan early, for example if you sell and do not move the plan to a new home, you may pay an early repayment charge. These can be large.
Drawdown
Interest is only charged on money you have taken. Later withdrawals may be at a different rate from the first.
Moving home
Moving the plan to a new home can involve a fee, and the new home must meet the lender’s rules.
Voluntary repayments
Many plans let you repay up to a set amount each year without a charge. Check the limits.
Questions
Is the rate fixed?
On plans that meet Equity Release Council standards, the rate is fixed for life or has a fixed upper limit.
Will I get the lowest advertised rate?
Not necessarily. The lowest rates are usually for smaller releases compared with the value of your home. Your adviser will show you the rate, the total cost and a personal illustration before you decide.
Can I make repayments?
Many plans let you make voluntary repayments up to a set limit each year without a charge, which reduces how much interest builds up.
Sources
- Lowest (6.25% MER) and highest (10.53% MER) advertised lifetime mortgage rates: publicly advertised rates checked 27 September 2026, Trusted Equity Release.
- Adviser survey (80.6% of firms whose customers did not proceed cited rates being too high), Q3 2026: Equity Release Council, published 26 October 2026.
- Valuation (£150 to £1,500) and specialist solicitor (about £860) fees: Legal & General, costs of downsizing vs equity release, based on June 2026 fees.
- Types of fees and charges: Equity Release Council, “Fees and charges” guide.
- Fixed or capped rates and the no negative equity guarantee: Equity Release Council standards.
Figures are checked when the page is updated and can change. Your own figures will come from the lender and your adviser.