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.”
