The importance of regularly reviewing your equity release plan

Could you get a better equity release deal by switching?

Written in line with our editorial policy.

As the name suggests, a lifetime mortgage is typically a lifelong commitment. But did you know that you should still regularly review your equity release plan – and that you may be able to switch plans for a better deal?

An equity release plan review could save you or your estate potentially thousands of pounds in the long-run. Plus, if your health or lifestyle has changed, you may be able to switch plans to achieve a lower interest rate or even unlock more cash than you could before.

Here’s what we cover to help you understand the importance of regularly reviewing your equity release plan:

• How equity release works
• Why is an equity release plan review important?
• Have there been any changes to your circumstances?
• Why changing interest rates is important
• What else you should consider during your equity release review
• How do I review my equity release plan?

How equity release works

Equity release is a way for homeowners aged 55+ to free up some of the money from their home’s value without having to sell, move or make any mandatory monthly repayments.

The money you unlock can be spent however you wish after any outstanding mortgage is repaid first. When you pass away or move into long-term care, your home is sold to repay your loan, plus any interest that has built up. 

If you want to prevent or reduce interest accruing on your plan, you can choose an interest-only equity release plan or make voluntary ad hoc payments as and when you wish. Some providers allow you to repay up to 10% of your overall plan every year penalty-free.

Already have a plan? Find out more about switching plans here, or talk to our friendly consultants on 0808 178 3055. You can also request a call back at a time that suits you. Or if you don’t have a plan, you can check your eligibility and get an initial indication of how much tax-free cash you could unlock.

Why is an equity release plan review important?

Though you typically arrange equity release for life, it doesn’t mean you have to stay with the same provider or keep the same plan. In actual fact, reviewing your plan to check you are on the best deal could achieve one or more of these goals:

• Access a more competitive rate
• Unlock more tax-free cash from your home
• Choose a plan with new or more flexible features 
• Potentially save thousands and leave more to your beneficiaries

Have there been any changes to your circumstances?

If there has been a change to your health or circumstances since you took out your existing plan then you may find you could get a better deal by switching.

There are a number of factors that could see you enjoying more money or a more competitive interest rate. This is because the amount that you can release from your home depends on:

• Your age or the age of the youngest borrower if a couple. It means you could free up more money simply by being older now. 
• The value of your home. You may be able to release more if your home has risen in value significantly since you took out your existing plan. 
• If you have any qualifying adverse health conditions or lifestyle factors. If you have been diagnosed with a health condition such as high blood pressure, you may qualify for enhanced equity release terms.

If any of the above circumstances have changed for you, it could be worth having a review of your equity release plan to check you are getting the best deal. Our selected advisers can check your plan details and let you know whether you can get a better deal. Just call us on  0808 178 3055 or request a call back and we can arrange a no-obligation appointment for you.

Why changing interest rates are important

As with standard mortgages, equity release interest rates rise and fall broadly in line with the Bank of England interest rate. If you took out equity release when rates were typically higher than they are now, you could potentially save by switching.

Despite interest rates increasing since their all-time low in March 2021, the rate you are on may still be higher than rates available today. This depends on when you took out your plan. Our selected advisers can check this for you, quickly and with no obligation to proceed unless you wish. 

What else you should consider during your equity release review

There are other factors you may wish to consider too, such as the provider you are with. 

For example, is your lender still in business today? Are they on the Equity Release Council’s panel of approved lenders? If not, you may want to look at the additional safeguards and protections you can benefit from by switching your plan. 

When considering a switch, you will also need to look at your current terms and conditions, as you may incur hefty early repayment charges by ending your plan to switch to another. 

Our selected advisers will be able to check your current plan on your behalf to be absolutely sure of what you are currently tied into before recommending how to proceed.

How do I review my equity release plan?

At Equity Release Wise, we’re passionate about always making sure you are getting the best deal. Now that you understand the importance of regularly reviewing your equity release plan, why not review your equity release plan with our selected equity release advisers? 

Find out what switching could do for you by calling us on 0808 178 3055 or request a call back and we can arrange a no-obligation appointment with an adviser for you.