Swap your equity release plan

Over the past few years lifetime mortgages have become highly popular which has encouraged more providers to enter the equity release market. This has produced some fierce competition which has pushed interest rates on lifetime mortgages down. You should never underestimate the effect an increase or decrease of just 1% can have on your equity release plan.

So if you released cash from your home with an equity release plan over 5 years ago, now could be the time to take advantage of these rates.

Change to a more competitive equity release plan

By swapping to a more competitive equity release plan, you could considerably reduce the amount of interest that accumulates in the future. The table below illustrates the difference in the highest lifetime mortgage interest rate from 5 years ago (2003) compared to the lowest interest rate available in 2008.

£50,000 borrowed	Lifetime Mortgage interest rate	Total amount owing after
		5 years	10 years	15 years
2003	7.28%	£71,050	£100,962	£143,467
2008	6.09%	£67,196	£90,306	£121,363
	Save by switching	£3,854	£10,656	£22,104

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 on old plan V (Interest on new plan +ERC+ all associated costs or fees for moving to new plan)

We will search the whole equity release market to find the most competitive lifetime mortgage on your behalf, and if the interest charges on your old plan work out to be higher than the early repayment charges, plus other fees, and interest on the new plan then your independent equity release adviser could even help you to release more equity from your home to spend as you wish.

Click here to ask one of our independent advisers to contact you about switching your equity release plan.

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