Review your existing equity release plan

As the providers of lifetime mortgages has increased in recent years and interest rates have fallen market forces have made today’s lifetime mortgages more competitve for customers than in the past.. It is vital not to get caught out by fluctuating interest rates, and you should never underestimate the effect an increase or decrease just 1% can have on your equity release plan. Interest rates dropped by almost 1% in 2005, but they have risen since. However there are still some great deals available for lifetime mortgages and rates are much lower than they used to be, so if you released cash from your home with equity release schemes over 5-10 years ago, now may be the time to take advantage of these lower rates.

Potentially change to a more competitive equity release plan

By reviewing your existing lifetime mortgage against todays deals could save your estate £1000’s in interest. The table below illustrates the difference in lifetime mortgage interest rates from 6 years ago, when rates were around 8%, to the lower interest rates available today.

Table showing the difference in lifetime mortgage interest rates
Amount Borrowed Lifetime Mortgage Interest Rate Total Amount Owing After (Years)
    5 10 15
£70,000 8.20% £103,809 £153,947 £228,301
£70,000 5.99% £93,632 £125,241 £167,522
  Save by switching £10,177 £28,706 £60,779


Even if your plan has early repayment charges, changing to an equity release plan with a lower interest rate could prove more beneficial than sticking with your current equity release plan. We can find out whether it would be wise for you to switch your lifetime mortgage by working out how much it would cost. We calculate this by comparing:

Interest charges V (early repayment charge + all associated costs or fees for new equity release plan)

If the interest charges work out to be higher than the early repayment charges and other fees, your independent financial adviser from The Equity Release Bureau will research the whole equity release market to find the most competitive lifetime mortgage on your behalf, and depending on the plan you choose, could even help you to release more equity from your home to spend as you wish.

Use the form on the right of the page to ask one of our independent advisers to contact you about switching your equity release plan or call us free on 0800 531 6027.

This is an equity release plan. To understand the features and risks ask for a personalised illustration.

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