Review Your Plan in Oct 2021

Why You Must Review Your Equity Release Plan in 2021

Did You Know That Top Equity Release Lenders Provide a Free Service That Allows You to Review Your Current Equity Release Plan? If You Unlocked Equity or Signed a Plan Before 2020, We Strongly Advise That You Make Use of This Essential Service.

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Why’s It Vital To Review Your Plan?

The equity release market is ever-shifting and growing. With new competitors popping up, rising property prices, and industry growth, the market’s becoming vastly more competitive. As things currently stand, equity release has never been safer or cheaper.
If you stick to your current plan, you might be paying more interest than you need to, could miss out on fantastic benefits, or could even have more equity available in your home that you’re not even aware of.

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5 Benefits of Reviewing Your Plan

Here are the 5 MUST KNOW benefits of reviewing your current equity release plan:

  • You might be able to lower your current interest rates. This means that your estate will owe less on your loan when you pass away or move into permanent care.
  • With property prices rising, you might be surprised to learn that your home valuation is now a lot higher, meaning that there is more equity to unlock from your estate.
  • You could gain access to brilliant benefits that you never had before, like a drawdown facility or inheritance protection.
  • With the industry tighter than ever, you could get a plan with better terms and conditions.
  • If you don’t have one, you’ll want a plan with a ‘no negative equity guarantee’.
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Equity Release of Years Gone By

While equity release has been around for a very long time, the industry has drastically shifted. Let’s look at the historic equity release market, before we look at the current landscape.

Pre-1991

The Equity Release Council was formed in 1991. They were founded to regulate an industry fraught with dubious lenders and fraudulent activity. Many older folks ended up knee-deep in crippling debt as a result of dodgy plans. The council implemented numerous protection laws to help elderly folks avoid being scammed by illegitimate lenders.

If you took out a plan before 1991, a review is vital. 

5 Years Ago

While the Equity Release Council was already working their magic by then, interest rates were vastly higher than what you find today. Standard interest rates for a lifetime mortgage were an average of 6%. 2021’s picture is totally different.

property value

The 2021 Equity Release Market

As things stand, equity release interest rates are at an all-time low. You can achieve rates as low as 2.3%, depending on your circumstances and the value of your property. The average equity release interest rates are around 3.2%, a steep contrast to what you would have found 5 years ago.

Equity Release Plan Overview – 5 Years Ago

Interest Rate Balance after 5 years Balance after 10 years Balance after 15 years
8.25% £84,726 £125,937 £187,196
5.65% £75,028 £98,758 £129,993
Total Saving £9,698 £27,179 £57,203

In Conclusion

While you’re under no obligation to switch plans, it’s undoubtedly essential to renew your plan, perhaps even annually. You never know what you could achieve and how an updated plan could change your life.


Get in touch with your financial adviser or speak to your equity release plan provider today!

Got Questions? Check These First

Should I Review My Equity Release Plan?

How Can I Get My Equity Release Plan Reviewed?

Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations.

Contributors: Nicola Date, Katherine Read
Reviewed by Francis Hui

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HOW MUCH EQUITY CAN YOU RELEASE?

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Written by
Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
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Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.
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Written by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
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Written by
Katherine Read
Financial Planning Reporter

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.
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Written by
Nicola Date
Writer & Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

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