Why switch your equity release plan?
New equity release deals are coming into the market all the time, often with low set-up costs and better features. If you took out your lifetime mortgage several years ago, then it’s likely that there’s a better plan available for you. By switching to a more competitive lifetime mortgage you may be able to:
Get a better interest rate
Interest rates have dropped in recent years, so it’s likely you’d be able to get a deal if you’ve had your existing plan for a while.Get a personalised quite
Access more tax-free cash
As your house is likely to have increased in value and you will be older you may be able to release more cash with a new plan.Calculate release amount
Unlock flexible features
Modern equity release plans come with a range of features designed to meet your needs now and in the future.Explore lifetime mortgages
Switching could potentially save you thousands
The table below demonstrates the difference in interest rates and how reviewing your current plan could potentially save your estate thousands of pounds. This compares an interest rate of 6% compared to 3%:
|6% Interest||3% Interest|
|Year||Loan||Interest||Total Owed||Loan||Interest||Total Owed|
Even in just 5 years the difference to your loan could be £8,947!
It’s important to remember that:
- although your equity release loan will be growing, hopefully so will the value of your property.
- you can pay the interest each month to with an interest only lifetime mortgage so that your loan amount remains the same.
- if you take out a drawdown lifetime mortgage you only pay interest on the money released.
When to look for a better deal
Your adviser can review your existing plan and advice you on whether or not to switch. They will calculate the associated costs and review your personal situation to check if the features on your plan still match your needs, before searching the market for a better deal. The ideal time to get in touch could be:
- When your circumstances change – if you’ve had your existing plan for over a few years then tell us what’s changed and we’ll check you’re still on the right plan.
- When you need more cash – if you are looking to release more money from your existing plan, then this is the ideal time to ask us to search the market for a better deal.
- When transferring to a new home – if you want to move house and port your existing plan to your new property, it may be worth checking whether it’s still the best plan for your new home and future needs.
Switching is easy – we do it for you!
Switching plans is often a good financial move, but you need to be aware of these things before you take the next step. Our friendly advisers can help you to explore your options without it costing you a penny. They will help you to consider:
- As with your original plan costs such as solicitor and arrangement fees will be incurred. These will vary depending upon the plan you want to move to but could be significant. We charge an advice fee of £995, payable on completion if you decide to go ahead.
- Early repayment charges (ERCs). Lifetime mortgages aren’t designed to be repaid early and many older plans have significant ERCs. You adviser will calculate these, as they could mean that it is not in your best financial interest to change plans.