Switching Equity Release Plans in Oct 2021

Do You Want to Switch Your Equity Release Loan?

Here You Will Find the Most Extensive and Useful Advice For Switching Equity Release Plans. Contact Us For More Information on How to Navigate Shares.

Got a Question?

Need a Quick Answer?

* Get an expert to give you a quick call.

Switching Equity Release Plans
Audio Thumbnail
Sound Bar

Switching Equity Release Plans: 7 Steps to Saving a Fortune!

Listen up: If you released equity before 2020, you’re likely paying more interest than necessary!

Equity release interest rates were around 6% just 5 years ago, and boy have things changed! By switching plans, you could save your family a fortune when your property is sold.

By working through this article:

  • You’ll learn the 7 steps to switching your equity release mortgage.
  • You’ll discover if switching plans is right for you.
  • Finally, you’ll have the tools to decide if switching equity release plans is worth the effort in Oct 2021.

As experts in the field, we’ve looked at over 220 equity release plans available today and compared them to offerings of the past.

Whether you’re undecided or not, if you’re looking to potentially switch up your equity release plan, you’ll need to know what steps to take in Oct 2021. Here they are!

What Is Equity Release?

Before you do so, we’ve summed up the most important information about equity release in this quick video. Check it out!

Switching Equity Release Mortgages Effectively in Oct 2021

With the lowest ever equity release interest rates and a larger selection of lifetime mortgage schemes accessible today, most people wonder if they can switch their equity release plan for a more convenient one. With shifts in the market, it might just be worth the effort.

What’s Changed?

Thanks to the Equity Release Council and Financial Conduct Authority, you can switch to a better plan if you wish to. It’s your money, your choice, and no one can stop you from making the best decision for your future. And, lucky for you, there are so many to choose from, so you’ll definitely find one that suits you perfectly.

But, first!

It’s not that straightforward switching to a new lender or even a new equity release mortgage. For the switch-over to be viable, it’s crucial to consider several factors, including the early repayment charge clause. An early repayment charge (ERC) is typically a penalty that applies to specific equity release plans. While most mortgage providers are looking more carefully into the early repayment charge, they didn’t do so a few years back.

As the years went by, the actual charge varied from one loan policy to another. Most equity release schemes range from a fixed percentage charge of 5% of the sum repaid up to as high as 100% of the total amount borrowed.

As if that’s not enough.

You’ll need to have a thorough look into every equity release company in Oct 2021 and see what they charge for everything. Such a high penalty can make the switch-over entirely unviable, even if the interest rates are significantly lower. That’s not something you want to happen.

What Other Factors Do You Need to Consider

What Other Factors Do You Need to Consider?

Well, like the early repayment charges, you also need to take into account elements like the:

The Valuation Fee – These costs are usually paid upfront on your application and are dependent on the state market value. The higher the property valuation, the more costly the valuation fees. Therefore, you must look for equity release companies that offer a free valuation since there won’t be upfront fees.

The Application Fee – The plan provider typically deducts the fee from the lifetime mortgage proceeds upon completion. Some equity release firms will include this. However, it might eventually attract compound interests.

*Pro Tip – Some equity release companies won’t charge you an application fee, which helps cut down the set-up costs. So, it’s imperative to compare equity release quotes first to get the best equity release deal. You don’t want to kick yourself later when you realise there is a better provider with fewer costs involved. You want to make sure you get the best price with the least extra fees and payments.

The Solicitor’s Fees – As part of SHIP rules, you’ll have to consult a legal adviser who’s separate from the mortgage provider. The solicitor will help you understand all the legal requirements of the equity release mortgage. It’s important to remember that solicitor’s fees are unavoidable. Therefore, you’ll benefit from shopping around to find an excellent deal. Find one you can trust and with whom you feel most comfortable.

The main factor you need to consider, however, is the interest rates. In general, interest rates are lower in the current market climate than a few years back. With the increasing popularity of the equity release schemes, mortgage products are becoming more competitive. This, in turn, vastly assists to reduce interest rates. Better yet, you’ll be saving so much money in the long run!

Who Can You Turn To

Who Can You Turn To?

As per the ERC’s standards, the best person to consult in Oct 2021 is a financial adviser. Find one that has expertise in equity release plans. They’ll offer you objective and valuable equity release advice on the various mortgage providers and loans.

At the end of the day, it’s easier and more time-effective to be assisted by someone who knows all about equity release plans.

The advisor charges a flat rate for their services, taken into account when calculating the setup expenses for a new equity release mortgage. The best equity release advisers are independent since they have access to the whole equity release market.

Better yet…

They conduct research and help you find the best equity release remortgage deals, which can include incentives like a free valuation, cashback, or even no application fee with some plan providers.

Can One Borrow More Capital?

Can One Borrow More Capital?

Yes, you can borrow more capital if you need to. Great, isn’t it? Older mortgage plans were inflexible, as there were no drawdown lifetime mortgages. Thus, if you’re looking to borrow some supplementary finances to remortgage your equity release loans, you can find flexible, reliable, cost-effective plans, with better interest-rate deals.

Best of all:

You can also borrow more capital, especially with mortgage deals that focus on health and lifestyle. Equity release has come a far way and has improved so much.

Moreover, to figure out how much you can release with an equity release mortgage, you can efficiently use our equity release calculator. To do this, you’ll have to input:

  • Your postcode – you need to own an estate in the UK.
  • The youngest homeowner’s age – who needs to be aged 55 and above (the older you are, the more capital you can borrow).
  • Your property market value – your residence needs to be valued at more than £70,000.
Switching Equity Release Plans

So, What Are The 7 Steps in Oct 2021?

  1. Contact your financial adviser.
  2. Inquire if your current plan gives you the option to switch.
  3. Learn if your old plan has early repayment charges.
  4. Consult with a few lenders to find new plan options.
  5. Discover if making the switch is financially viable or not.
  6. Go through the process of the paper work, an updated valuation, and anything further required.
  7. Switch to your new plan and continue to enjoy your life!

Got Questions? Check These First

Can You Switch Your Equity Release Plan?

Can You Save Cash by Switching Your Equity Release Plan?

In Conclusion

Switching equity plans is a fairly simple process, and it can help you save money in the long run!

If you’ve been stuck with an equity release provider that you’re unhappy with, asks for too many fees and extra charges, or has high-interest rate, then you should switch today.

Consider all your options and all the different providers in Oct 2021, including their prices, payments, and rates to choose the best one for your future.

Most importantly, if your current plan provider is not a member of the Equity Release Council, you must switch today!

Are you ready to make the switch? Speak to your financial adviser today!

Plans are regulated by the Financial Conduct Authority, which means advisers and product providers are obliged to adhere to published standards regarding their knowledge and the way they run their businesses.


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

What people say

You are the best. You delivered what you mentioned you would that was much better than anybody else. I can not rate you highly enough!!
Brenden
Brenden
SovereignBoss client
I'd like to commend the excellent support we received from you guys in our recent equity release application, which proceeded faster than we could have hoped. Thank you so much.
Margaret
Margaret Doyle
SovereignBoss client
I have to say my experience with SovereignBoss was positive from start to finish. The level of customer service I received from John was simply outstanding, thank you!
janus
Janus Kern
SovereignBoss client

You may also like

  1. PORTFOLIO CHOICE IN RETIREMENT—WHAT IS THE OPTIMAL HOME EQUITY RELEASE PRODUCT?
    2016 Journal of Risk and Insurance Volume: 83, Issue: 2, pp 421-446 DOI: 10.1111/JORI.12068
    Katja Hanewald 1,Thomas Post 2,Michael Sherris 1
    1 University of New South Wales ,2 Finance 123
  2. Pricing and Risk Capital in the Equity Release Market
    2008 British Actuarial Journal Volume: 14, Issue: 1, pp 41-91 DOI: 10.1017/S1357321700001628
    G. M. Hosty 1,S. J. Groves 2,C. A. Murray ,M. Shah
    1 Partnership Assurance, Sackville House, 143-149 Fenchurch Street, London EC3M 6BN, U.K. Tel: +44(0)7712789154,2 Email: ged.hosty@partnership.co.uk 123
  3. The market for equity release products: lessons from the international experience
    2010 Southern African Business Review Volume: 14, Issue: 2, pp 24-45
    J. M. Luiz ,G. Stobie
    University of the Witwatersrand 12
  4. Can equity release help older home-owners improve their quality of life?
    2010
    Jerome Billeter 1
  5. Home equity release for long term care financing: an improved market structure and pricing approach
    2015 Annals of Actuarial Science Volume: 9, Issue: 1, pp 85-107 DOI: 10.1017/S1748499514000268
    Doug W. Andrews 1,Jaideep S Oberoi 2
    1 University of Waterloo ,2 University of Kent 1234
  6. Pensions and housing wealth: Quantitative data on market conditions for equity release schemes in the EU
    2016 Thuenen-Series of Applied Economic Theory
    Peter Hennecke ,Pierluigi Murro ,Doris Neuberger ,Flaviana Palmisano 1
  7. Asset-based Welfare, Equity Release and the Meaning of the Owned Home
    2015 Housing Studies Volume: 30, Issue: 3, pp 392-412 DOI: 10.1080/02673037.2014.963523
    Lorna Fox O’mahony ,Louise Overton
    University of Essex 1234
  8. On Pricing and Hedging the No‐Negative‐Equity Guarantee in Equity Release Mechanisms
    2009 Journal of Risk and Insurance Volume: 77, Issue: 2, pp 499-522 DOI: 10.1111/J.1539-6975.2009.01344.X
    Johnny Siu-Hang Li ,Mary R. Hardy ,Ken Seng Tan
    University of Waterloo 1234
  9. How profitable are Equity Release Mortgages
    2020 Economics Letters Volume: 197, pp 109651 DOI: 10.1016/J.ECONLET.2020.109651
    Dean Buckner 1,Kevin Dowd 2
    1 The Eumaeus Project, United Kingdom,2 Durham University 12
  10. Understanding Attitudes to Paying for Care amongst Equity Release Consumers: citizenship, solidarity and the ‘hardworking homeowner’
    2016 Journal of Social Policy Volume: 46, Issue: 1, pp 49-67 DOI: 10.1017/S0047279416000416
    Louise Overton 1,Lorna Fox O’mahony 2
    1 University of Birmingham ,2 University of Essex 123
Have You Read Our Most Popular Equity Release Articles?

HOW MUCH EQUITY CAN YOU RELEASE?

Most people are using equity release as a means of retaining the use of their house while also obtaining a lump sum or a steady stream of income. Get matched with an expert and check your eligibility for equity release options.

Use our free equity release calculator & see how much you can release today.

Request a Call Back Below 👇

We’ll get an expert to call you back shortly.

Equity Release Call Back
Please check your details are 100% correct

We Hate Spam as Much as You. 100% Secure.

As Featured In
yahoofinance marketwatch

How Much Can You Release?

Use the FREE Calculator Below 👇

 

Equity Release Calculator

Value of Your Home?

50000

Drag me

100% Secure & Fast. Takes Just 8 Seconds.

As Featured In
yahoofinance marketwatch
rachel w

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.
john lawson profile.jpg

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.
francis

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.
kath icon

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.
nicola

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.

See How Much You Can Release 👇

Use the QUICK form below.

 

Equity Release Calculator

Value of Your Home?

50000

Drag me

100% Secure & Fast. Takes Just 8 Seconds.

As Featured In
yahoofinance marketwatch