Questions to Ask Before Taking Equity Release
Equity release is a long-term commitment with consequences that extend across the rest of your life. Working through these questions — before you meet an adviser, during the advice process, and before you sign anything — helps make sure you have considered every important angle.
Questions to ask yourself
These are questions to reflect on before you begin the formal advice process. There are no right or wrong answers — but being clear in your own mind before meeting an adviser means you will get more from the conversation.
Do I need all the money now, or could I take it in stages?
If you do not need the full amount immediately, a drawdown plan may reduce the total interest that accumulates. Taking a large lump sum when only part of it is needed right away increases the compounding cost unnecessarily. See lump sum vs drawdown equity release.Have I genuinely considered the alternatives?
Downsizing, a retirement interest-only mortgage, pension drawdown, or family support may suit your situation better. Equity release should be a considered choice, not the default because it seems straightforward. See alternatives to equity release.Have I spoken to my family about this?
Family members — particularly those who may expect to inherit — are often affected by equity release decisions. They cannot veto your choice, but early conversations prevent misunderstandings and family conflict later. You do not need their permission; a conversation is enough.Do I receive any means-tested benefits?
Pension Credit, Council Tax Reduction, Housing Benefit, and Universal Credit are all means-tested. Releasing equity creates cash savings that count towards the capital thresholds for these benefits. If you receive any of them, make sure a benefits check forms part of your advice. See equity release and benefits.Am I clear on how compound interest works over a long period?
The interest on a lifetime mortgage compounds annually. A loan at 6% does not simply add 6% per year to the original sum — it adds 6% to the growing balance. Over 15–20 years, this can result in a loan balance two or three times the original amount. Make sure you have seen a worked projection before proceeding. See how equity release works.Questions to ask your adviser
These are questions to put directly to any adviser you meet. A good adviser will welcome them; an adviser who is uncomfortable with direct questions is worth treating with caution.
Are you whole-of-market?
A whole-of-market adviser can recommend any ERC-approved product from any lender. A restricted adviser works from a limited panel. Ask directly and expect a direct answer.How are you paid?
Understand whether there is a fee to you, a commission from the lender, or both. Neither arrangement is wrong, but you are entitled to know before proceeding.How many products have you compared to arrive at this recommendation?
A thorough adviser should be able to tell you how many products they reviewed and why the recommended product was preferred over others.What is the early repayment charge structure on this product?
ERCs can be significant — sometimes 5–25% of the outstanding loan. Understand what it would cost to exit the plan in various scenarios: moving home, a change in circumstances, or a decision to repay early. See can I pay back equity release early.Does this product include a voluntary repayment option?
Many products allow you to repay up to 10–12% of the original loan each year without incurring an ERC. This can significantly limit the compounding effect over time. Confirm whether this feature is included and on what terms.Does the plan include a no-negative-equity guarantee?
All Equity Release Council-approved products include this guarantee, which means the total you (or your estate) owe can never exceed what the property sells for. Confirm the product is ERC-approved. See what is a no-negative-equity guarantee.Is this plan Equity Release Council approved?
ERC approval means the product meets the Council's consumer protection standards, including the no-negative-equity guarantee, the right to remain in the property, and ILA requirements. Confirm this explicitly.Questions about the product itself
These are questions about the specific product being recommended. The answers should appear in the suitability report — but it is worth asking directly to confirm you have understood them correctly.
What is the AER on this product?
The Annual Equivalent Rate (AER) is the rate used to calculate compound interest. Make sure you know the exact rate and that any projections you have been shown use this rate. Equity release rates currently range from approximately 5.97% to 6.28% AER — check current rates with your adviser as they change regularly.If this is a drawdown plan, does the rate on future drawdowns change?
Some drawdown plans fix the rate on future drawdowns at today's rate; others apply the rate prevailing at the time of each future draw. In a rising rate environment, this distinction matters. Confirm which applies to this product.What triggers repayment of the loan?
For most lifetime mortgages, repayment is triggered by death or permanent entry into long-term care. Confirm the exact trigger events listed in the product documentation and what the repayment timescale is.Does the plan include downsizing protection?
Some products include a clause allowing you to repay the loan without an ERC if you downsize after a set period (often five years). If moving home in future is a possibility, this feature is worth checking. See equity release and moving home.Can I port this plan to a new property if I move?
Most ERC-approved plans are portable — meaning the loan can transfer to a new property subject to lender approval of the new property. Confirm this is the case for the product being recommended, and understand what criteria the new property must meet.After the advice consultation
Once your adviser has given their recommendation, they must provide a written suitability report. This document is important — read it carefully. It should set out:
- Why equity release is considered appropriate for your circumstances
- Why the recommended product was selected over alternatives
- The key product features: rate, loan amount, ERC structure, voluntary repayment option
- A projection of the loan balance at future points (typically 10, 15, and 20 years)
- Any risks or concerns the adviser has noted
You are entitled to take as much time as you need to consider the recommendation. There is no obligation to proceed after receiving the suitability report. You can ask for clarification on anything you do not understand, seek a second opinion from another adviser, or decide not to proceed — all without any financial penalty at this stage.
After the offer is issued, Equity Release Council standards require a minimum seven-day reflection period before completion can take place. Use this time. If any doubt remains, ask questions before signing the ILA certificate.
For the full step-by-step process overview, see the equity release process step by step. For guidance on choosing a good adviser, see how to choose an equity release adviser.
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