How you could save more than £50,000 by switching your equity release plan


Older homeowners can save thousands of pounds by checking if they can switch to a better equity release deal.

A large number of people are using equity releases to free up the cash they have in their homes.


Anyone who is 55 years of age or older can potentially access an equity release

Equity release is available to people 55 or older, and lets you access the cash you have through the value of your assets.

It is like a mortgage because it is a secured loan against your home. But the main difference is that you don’t have to make monthly payments.

Instead the interest on the loan is rolled up, and paid when you go into care or when you die.

Lenders can withdraw as little as £10,000, but depending on the value of your home and the plan you choose, you can get significantly more – up to 58% of the value of your property.

Money is also tax free, so you don’t have to worry about bills from HMRC.

As home prices rise and people live longer in retirement, equity releases are becoming more popular.

According to the Equity Release Council, more than 23,000 homeowners took an equity release plan in the first three months of the year.

These borrowers took out an average of £94,000 from their home.

But if you already have an equity release plan, you can still save thousands of pounds.

Interest rates have come down in recent years, which means you can save money by switching to a different deal.

You may also find a more flexible plan that better suits your needs.

Here’s what you need to know.

Click here to know if you can save money by changing your existing plan,

Like a standard mortgage, you can convert your equity release loan into a better deal.

Edge Partnership, the UK’s largest equity release broker, said homeowners who switched last year saved an average of £51,211 over the life of their loan.

To be able to switch, you must have had your existing plan for at least 12 months.

It’s worth asking the broker for a review to see if you’re eligible – they’re often free, and can provide bumper savings.

This is all the more important as lakhs of families are grappling with a living crisis and struggling to deal with rising bills.

Retirees in particular may find that their pension income is not going as much as it used to be.

Click here to request a non-obligatory review of your plan

What you need to know about changing your equity release plan

Interest rates are on the rise, and this could mean that homeowners should consider closing the best deals as soon as possible.

Andrew Morris, Senior Equity Release Advisor at Edge Partnerships, said: “Anyone looking to replace their old plans should act now and review them free of charge to get ahead of the rate hike.”

In 2016, the average interest rate on equity release schemes was 6.15%.

Today they are very low at 4.33%

But as the Bank of England continues to raise interest rates, mortgage rates are bound to rise as well.

Morris added: “Equity release plans are also a lot more flexible than in years past, so the added benefit for anyone thinking about switching is that they have more control over the debt than they did at one time.”

Flexible Equity Release Option

Along with cheaper deals, borrowers who issue equity releases have far more options than ever before.

According to Moneyfacts, there are 665 different equity release plans available now, compared to just 66 in 2016.

Schemes that meet the standards set by the trade body Equity Release Council will now have to allow voluntary repayment, which can help prevent further escalation of your debt.

Some deals now allow borrowers to withdraw their money in pieces instead of taking the entire amount at once.

This can save you money because you only pay interest on the cash you have access to.

And now you can have the option of taking the home and taking the loan with you, depending on the terms and conditions set by the lender.

Is changing equity release plan right for everyone?

Talking to an expert can help if you are considering equity issuance


Talking to an expert can help if you are considering an equity issuance

Whether or not changing your plan is right for you will depend on your circumstances.

But it may be worth keeping an eye on the market in case better deals open up.

Edge Partnership said one reason people are often not able to change their plan is that the loan-to-value (LTV) ratio is too high.

Another factor to keep in mind is the early repayment fee (ERC) on the principal loan.

Some plans will charge an ERC, or exit fee, to end your current deal and switch to a new one.

If these are higher, it may outweigh any benefits of switching, especially if you haven’t had a loan for a long time.

Talking to an expert can help. An expert equity release advisor can examine the costs of your current plan and compare it to the new rates to see if it is worth switching.

How to Switch Your Equity Release Plan?

Brokers like Edge Partnership offer free reviews to help you find out if changing plans is an option.

Request a non-obligation review of your existing equity release plan,

When choosing an advisor to assist, make sure they can recommend plans from a variety of lenders (some may be associated with only one company).

This will ensure that you are recommended the best plan for your individual needs.

They will check such things as whether you qualify for the latest plan development, including the interest you earn on your equity release plan, and any early repayment charges (ERC)/exit charges on the principal loan.

The advisor will explain that the lifetime mortgage is secured on your home and that the loan, as well as interest, will be repaid after your death or going into long-term care.

As part of the free review, they should give you a personal example to explain all the features as well as the risks involved.

what are its dangers?

There are risks with equity releases and it is important to keep them in mind before choosing a plan.

For example, the cash you get from equity releases will boost your income, which may affect your eligibility for benefits such as pension credits.

Also remember that once you move into care or pass away, the debt will have to be paid off, which could mean selling the family home.

Some plans let you keep a portion of the proceeds of the sale of the property as an inheritance.

It is important to inform your loved ones about your plans to avoid any controversy.

Borrowers should consult a regulated equity release advisor before taking on any product to ensure that they understand all the risks as well as the benefits.

Age Participation’s Equity Release Calculator A good place to start. This can help you figure out how much money you can use, and put you in touch with an advisor to learn more.

Age Partnership provides preliminary advice for free and without obligation. So you only pay a fee – which is normally £1,795 – if you go ahead.

Click here to find out if you can save money by changing your existing plan,


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