Equity release fees challenged

Amanda Jarvis

February 13, 2006

The fees eat into the cash released by retired homeowners and Economic Lifestyle is urging them to shop around for a deal which does not charge an application fee.

The company, which has recently launched its own reversion product, the Cash Release Plan, reveals that around 64% of equity release schemes levy upfront application fees ranging from £250 to £600.  However it believes increasing competition in the market will mean more firms not charging application fees.

Mark Neal, managing director of Economic Lifestyle, said: “Retired homeowners should not have to face huge charges for taking out an equity release scheme. In many cases retired people are not funding a lavish lifestyle with the equity they release but are merely getting by on a very tight budget.  Any additional charges often come as a nasty surprise. 

“Competition is increasing in the equity release marketplace.  It is now possible to find a policy that is both competitively priced and does not charge prohibitive fees.  This is something we strive for in the products we offer.”

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