Reviewing Your Equity Release Mortgage in 2022

Is Reviewing Your Equity Release Plan Essential? We’ve Got You Covered
Contributors: Nicola Date, Katherine Read. Reviewed by Francis Hui
It’s Never Too Late to Review Your Existing Mortgage. However, It Can Be Complicated and Time-Consuming to Do So. The Good News Is That There Are Many Ways You Can Make the Process Much Easier for Yourself.

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An equity release mortgage is a form of home loan that allows people over the age of 55 to borrow against the value of their property.

This money is a fantastic way of financing your dream retirement while still living in your beloved home.

If you currently have a long-standing equity release mortgage, then this article is for you!

We will discuss why you need to review your plan regularly and how taking a closer look at the current interest rates can save you money.

Why Should You Review Your Plan?

Many people don’t realise that equity release mortgages come with a fixed interest rate.

As time goes on, your monthly mortgage repayments will increase due to compound interest, and so there may be an opportunity to get better rates by refinancing1 or transferring the loan.

One of the most significant advantages of reviewing existing plans is if you still have some leftover equity from when you took out your original plan.

If this is the case, then it’s worth checking whether these funds can be used with new, lower rates because they are tax-free!

Reviewing your current situation could save money in interest charges,

And allow you to take advantage of any unused monies that would otherwise sit idle in cash investments, essentially allowing them access to more tax-free capital.

Reason For Considering

What Has Changed Since You Took Out Your Original Plan?

The amount that you can release from your home is determined by:

  • Your age
  • The age of your spouse if you have a joint plan
  • The condition of your home
  • The condition of your health

Older and sicklier homeowners can generally borrow more and get a better deal.

If any of these circumstances have changed for you, it’s worth looking into updating your plan.

Reviewing Your Equity Release Mortgage

How Low Have Equity Release Interest Rates Fallen?

Today, the rates on equity release plans are much lower than they were when you took out your original plan.

This is primarily due to several factors, including inflation and changes in interest rates.

A few years ago, many people looked at the potential for an equity release mortgage as a retirement tool used sparingly.

This is because there are costs involved in equity release.

With the emergence of better mortgage options, the Equity Release Council, and a changing job market,

Interest rates on equity release mortgages have fallen enough so to make it one of the best retirement financial plans on the market.

When you compare them with other forms such as annuity plans or pensions, there are some distinct advantages to taking out an equity-release plan instead!

Interest Rates

What Other Factors Should be Considered Other than the Interest Rates?

When considering switching your equity release plan, you should look at all the benefits involved.

Firstly, be sure that your plan provider is a member of the Equity Release Council. If not, we suggest you switch!

Next, you must have a look at any deals available, all terms and conditions, and what the early repayment charges are, over and above how much equity the company will allow you to release.

Speak to your financial adviser to find the best plan for you.

Reviewing Your Equity Release Mortgage

What Action Should I Take Now?

If you want to make sure that your equity release plan is still the best option for retirement,

You must contact a financial adviser who can offer advice, and review any changes in circumstances since when you first took out the loan.

This might mean refinancing if rates have gone down or asking about whether paying off an early repayment penalty would be worthwhile,

Something which will depend on how long it has been since the original agreement was made!

As always, talk over these options with family members before making any final decisions, as this could help ensure that everyone agrees about what should happen next.

That way, there won’t be any unpleasant surprises later after everything has been agreed upon and things have moved forward – especially once you’re retired at last!

Action To Take

Common Questions

When Should I Review My Existing Equity Release Mortgage?

How Will Reviewing My Mortgage Affect Monthly Payments?

Do I Need a Solicitor to Review My Existing Equity Release Mortgage?

What Happens If I Find Out That the Mortgage Has Been Refinanced Without My Knowledge?

In Conclusion

With home equity rates at an all-time low, it is definitely worth reviewing your existing mortgage.

A fixed interest rate can provide some peace of mind for homeowners and investors alike in these uncertain economic times.

As the cost to borrow money increases exponentially with each passing day, now is not the time to take on more risk than necessary to maintain control over one’s assets. 

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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. Learn more about our editorial guidelines.

rachel w

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.
John Lawson

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.

Reviewed 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.
kath icon

Katherine Read
Consumer Affairs Writer

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.

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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