Equity release broker: what does one do, and how do you choose one?

Quick answer: what does an equity release broker do for you?

Why ask me to be your equity release broker?

Because you deal with one person throughout, and that person comes to you. I've worked in financial services since 1996 and specialised in later-life lending since 2009. I hold CeMAP, the Certificate in Equity Release (CERT CII (ER)) and the SOLLA Later Life Lending Advice Standard, and I'm a member of the Equity Release Council. SOLLA's directory lists me as an independent, whole-of-market adviser. I completed 40 equity release cases last year, and at least nine in ten of all my business has been face to face, because I like to look people in the eye and shake a hand. Trusted Equity Release is a trading name of Pellucid Ltd, authorised and regulated by the Financial Conduct Authority, FRN 981845.

★★★★★

“Had the pleasure of dealing with Jeremy on behalf of my mum for equity release on her home - if you want someone you can genuinely trust then don't go anywhere else! Jeremy is probably the most honest and genuine advisor that you will come across.”

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Is an equity release broker the same as an equity release adviser?

In practice, yes. Both give regulated advice on lifetime mortgages and recommend a plan; "broker" stresses that they compare lenders and arrange the loan, "adviser" that they give the advice. You'll also see "specialist", "lifetime mortgage broker" and "later-life lending adviser" used for the same job. The words matter much less than three questions: are they qualified in equity release, which lenders can they recommend, and how are they paid? Equity release needs its own qualification on top of a mortgage one, and a mortgage broker without it has to refer you on.

What does an equity release broker actually do?

More than find a rate. Here's the work, in the order it happens on my cases:

The FCA's rules for equity release advice spell out the second row: before recommending a plan, an adviser has to consider other ways you could raise the money, your entitlement to benefits, your tax position and your health and life expectancy. A broker who goes straight to the product has skipped the part that protects you.

Do you have to use a broker for equity release?

You have to take advice, but it doesn't have to come from a broker. Legal & General, for example, says you can't take out equity release without financial advice. Where it comes from changes what you can be offered. If you go to a lender first, its advice is usually limited to its own plans: Aviva says an adviser you contact through it can only advise on its lifetime mortgage and can't recommend one from another provider. A whole-of-market broker can recommend any lender's plan. My page on whether you need an adviser for equity release goes through the routes in more detail.

What does "whole of market" mean, and why does it matter?

It means the broker can recommend any lender's equity release plan, not one company's or a short list. There are three kinds of adviser:

It matters because lenders differ on the things that decide a case, and the headline rate is only one of them:

The lenders shown on my site include Aviva, Canada Life, Just, Legal & General, LiveMore, LV=, more2life, Pure Retirement, Royal London and Standard Life Home Finance, and being whole of market I'm not limited to them. How to judge the lenders themselves is on my page about the best equity release companies.

Why isn't the cheapest rate always the best plan?

Because a plan you can't use properly costs more in the end. A slightly lower rate with an early repayment charge that runs for 15 years can be the wrong choice for someone who might move or repay in five. A plan without drawdown can cost more than a dearer one with it, if you'd only need half the money now. I'll show you why the plan I recommend beat the cheaper ones, in writing.

How much does an equity release broker charge?

It varies, and any broker should tell you how they're paid before you go ahead. Echo Finance puts it plainly: some advisers charge a fixed fee, while others charge a percentage of the amount released. On top of that, lenders pay brokers a commission when a plan completes; Aviva, for example, says that if you go to it directly you won't pay a separate advice fee and it pays the adviser commission on completion instead. The main ways it's done:

Here's how I work. The first conversation is free. There's nothing to pay me unless your plan completes. My fee is fixed, not a percentage, so it doesn't rise with what you borrow, it can be taken from the money released, and it covers you for the life of the plan, so if you need help with it years later there's no new charge. I'll tell you the figure on the phone. You'll also have the lender's valuation and your solicitor's costs, and I'll set those out before you decide anything.

What will an equity release broker ask you?

Everything that changes the answer. These are the areas I cover at the first meeting, and why each one matters:

Your age, and your partner's

The age of the youngest borrower sets how much a lender will release: typically 25% to 28% of the home's value at 55, 40% to 43% at 70 and 50% to 57% from 80, on my equity release calculator. On a joint plan both of you need to be at least 55.

Your home

Its value, its construction, whether it's leasehold or freehold and where it is, because lenders accept different properties. A home worth less than a lender's minimum, or built in an unusual way, can rule some lenders out before rates come into it.

How much you need, and when

Borrowing more than you need means paying interest on money sitting in the bank. If you'll need more later, a drawdown plan can hold it in reserve instead.

Any mortgage or loan secured on the home

It has to be paid off from the money released, so it sets the minimum the plan has to provide.

Your health and lifestyle

Some conditions, and smoking, can mean a bigger release or a better rate with some lenders. I ask so the right lender is picked first time.

Your income, savings and benefits

Money released and kept in the bank can reduce means-tested benefits, so I check what you receive before deciding how much to take and when. Your income also tells me whether a cheaper route, such as a retirement interest-only mortgage, could work.

Your family and what you want to leave

Equity release reduces what you leave, and anyone living with you who isn't on the plan may have to sign a waiver. I'd always rather your family were in the room, or on the phone.

Whether you might move

Plans meeting Equity Release Council standards can move with you to a suitable home, but rules on where and what you can move to differ by lender.

Will a good equity release broker tell you not to go ahead?

Yes, and often. Aviva says it only suggests a lifetime mortgage for around a quarter of the people it speaks to, which tells you how often the honest answer is no. Mine has been on this site for years: if equity release isn't the right choice, I'll say so. Sometimes it's a remortgage your income could carry, which my colleagues at Pellucid arrange. Sometimes it's downsizing, or waiting a few years until you can release enough. Sometimes the need just goes away. One family I was helping no longer needed the money once probate came through, so I cancelled the application with no cancellation fee; the grandson wrote about it in his Google review. I don't arrange home reversion at all, because it doesn't fit how I want to work.

How do you check an equity release broker before you call?

Look the firm and the adviser up on the FCA register, check the adviser is a member of the Equity Release Council, ask whether they're whole of market and how they're paid, and read their reviews in full rather than the star rating. For me that's Pellucid Ltd, FRN 981845, and Jeremy Furnell, reference JLF01060, on the FCA register, and my entry in the Council's adviser directory. Each check, step by step, with what a good and a bad answer sound like, is on my page about how to find a trustworthy equity release adviser.

Should you choose a local equity release broker or a national one?

It depends how you want to be advised. Some national firms advise mostly by phone or video, from an office. A local broker can come to your home, which a lot of people in their seventies and eighties prefer, especially when family want to sit in. I cover Cambridgeshire, Norfolk, Suffolk, south Lincolnshire and Northamptonshire, within about 70 to 80 miles of March, and I'll travel further when a case needs it. Most people start with a phone call; after that it's a visit to your home, or the phone if you'd rather, and video only if you prefer it. My Equity Release Council listing promises one local point of contact throughout, with no call centres or administrators, and that's how it works. The towns I cover are on my where I work page.

In my experience the national firms prefer the bigger cases. A lot of mine are £70,000 to £80,000, and some are as small as £15,000. If you need a modest sum, that's no reason for anyone to give your case less time.

What happens after you call an equity release broker?

On my cases it goes like this. You can pause or stop at any point before completion.

Step 1: a free phone call

We talk through what the money is for, roughly what the home is worth, what's owed on it and your age. That's usually enough for me to tell you whether equity release is realistic, and if it plainly isn't, I'll say so on that call.

Step 2: a meeting at your home

I go through the fact find with you, and with family if you'd like them there, and we look at the alternatives properly. Nothing is signed at this meeting unless you want to go further.

Step 3: research and a written recommendation

I compare the market for your circumstances and send you a recommendation with an illustration from the lender: the rate, the fees, what you'll owe over time and any early repayment charges. There's no deadline to decide.

Step 4: the application

If you go ahead, I complete the application with you. I'm happy to fill in the forms with you at your kitchen table.

Step 5: the valuation and the offer

The lender sends a surveyor to value the home, then issues an offer. If the valuation comes in lower than expected, I'll go through the new figures with you before anything goes further.

Step 6: independent legal advice

Your solicitor explains the plan and its terms, which the Equity Release Council requires before you can sign. I can recommend a solicitor who does equity release day in, day out; the choice stays yours, but a firm that rarely does it is the most common cause of delay I see.

Step 7: completion, and afterwards

The money is released, any existing mortgage is cleared from it, and the rest comes to you. After that I'm still your adviser for the life of the plan. How long the whole thing usually takes is on my page how long does equity release take?

What protections come with a plan arranged through an Equity Release Council member?

Plans that meet the Council's standards must give you:

What the standards don't do is make equity release cheap. Interest compounds unless you pay it, the plan reduces what you leave, a lump sum can affect means-tested benefits, and repaying the whole plan early can bring an early repayment charge.

Final thoughts from me

What I'd want anyone choosing a broker to know:

• Equity release needs advice before you can take it, so the real question is who gives it.
• Whole of market means the broker can recommend any lender's plan, not one company's.
• The cheapest rate isn't always the best plan; early repayment charges, drawdown and criteria matter too.
• Ask how the broker is paid before you go ahead: fixed fee, percentage or commission.
• A good broker checks the alternatives first and will tell you when not to go ahead.
• With me, the first conversation is free and it's me from the first call to completion.