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.
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’.
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.
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.
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 Savings From – 5 Years Ago
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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!