Reviewing Your Equity Release Plan in Jan 2022

Have You Reviewed Your Existing Equity Release Plan Yet?

The Equity Release Plan Is a Complicated and Confusing Topic for Many, but It Doesn't Have to Be. We Look at Why You Must Review Your Current Equity Release Plan & How You Can Save a Fortune By Doing So

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Reviewing Your Equity Release Plan: Tips for Retirement

It’s natural to want to live out your retirement years in peace and security, but you need to make sure that you have the right financial plan in place. One thing that many people overlook when they are considering their options is equity release plans.

Equity release plans provide a way for retirees who own property or land with some value on it to access this value for specific purposes such as paying off debts, funding future care needs, and more.

What Is Equity Release & How Does It Work?

Equity release is a way to unlock some of the value in your home while you’re still living there. You can use this money for anything that you want. It might be a younger child going to college, paying for medical expenses, or anything else that you want. The earlier you do this, the better because your home is likely to be worth more later on in life than it was when you first moved into it.

Types of Equity Release

  • Lifetime Mortgage – A lifetime mortgage is a form of equity release that uses the value in your home to pay off an existing debt like a credit card or line of credit. You will still own and live in your property, but you won’t have to make any payments on this loan until after you die, when it’s time for repayment.
  • Home Reversion Plan – A home reversion plan is a way to sell off part of your house and then pay yourself for it with the money you receive. This option has become very popular recently because people like the idea that they will be paid back for something originally theirs, as opposed to having their property sold from under them so someone else can profit from all the years of effort put into owning it.

Re-evaluate Your Equity Release Plans

A major life event can have a large impact on your finances, and one of the most important decisions you’ll make is how to fund it. For many people, an equity release plan offers a flexible way to get cash when they need it without having to sell their home or other assets. But what are the risks? What if interest rates rise?

The equity release plans that you currently have in place may not be the best ones for your life situation. There are many types of equity release and they all offer different benefits and disadvantages. If any of these factors affect you, then it is time to review your equity release plan.

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Advantages of Reviewing Your Plan

Here are the top 5 reasons to review your current estate release plan:

  • It’s possible that you’ll be able to reduce your present interest rates. This implies that when you pass away or enter permanent care, your estate will owe less on your debt.
  • With rising property values, you may be startled to hear that your home’s value has increased significantly, implying that you have more equity to tap into.
  • You may be able to take advantage of previously unavailable benefits such as a drawdown facility or inheritance protection.
  • You might be able to purchase a plan with better terms and conditions now that the industry is tighter than ever.
  • If you don’t already have one, look for a plan that guarantees no negative equity.
equity release

Equity Release Market Today

Equity release interest rates are currently at an all-time low. Depending on your circumstances and the value of your property, you could get rates as low as 2.3%.

The typical equity release interest rate is roughly 2.5%, which is significantly lower than what you’d see 5 years ago. Assume you borrow £50,000 and don’t make any repayments. Let’s take a look at the interest rate savings that a plan review could provide!

Consider the savings you could make by moving to a newer, lower-interest equity release plan if your old one was at 7%.

equity release

In Conclusion

Equity release plans can be a great way to provide for your needs in retirement. But, it’s important that you review the terms of any equity release plan before signing on the dotted line.

If you’re considering an equity release plan as part of your long-term financial planning strategy, contact a financial advisor that can help you understand all the potential costs and benefits by running a free needs assessment on your home.

How Much Can You Release?

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Editorial Note: This content has been independently collected by the EveryInvestor advisor team and is offered on a non-advised basis. EveryInvestor 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.
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Taylor Holt
Estate Planning Expert

Taylor Is Our Resident Estate Planning Expert. He Knows That Everything Revolving Around Wills or Funeral Planning Can Be a Sensitive Subject That People Don’t Like to Discuss. But He Also Knows How Important It Is to Know All There Is to Know About It. Taylor Makes It His Mission to Spread Awareness About Estate Planning, and We Believe Everyinvestor Is the Best Platform to Do That.

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Monique Is Our Resident Pensions Expert. Many People Postpone Planning Out Their Pension, Thinking That Is Something They’ll Have to Worry Much Later in Life. Monique Knows How Important It Is to Start Planning Your Pension Early, and She Wants You to Know It Too!

Reviewing Your Equity Release Plan

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Lisa Schilling
Insurance Expert

Lisa Is Our Resident Insurance Expert. She Knows How Important It Is to Be Ready for Any Scenario, Especially When a Family Member Is Involved. Nobody Likes Being Found Unprepared in a Tough Situation! Lisa Can Find the Best Insurance to Cover Your Every Need, Present and Future.

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Doyle Edwards
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Doyle Is Our Resident Mortgages Expert. He Comes From a Long Line of Financial Gurus, and It Truly Shows. Despite His Young Age, There Is No Question He Cannot Answer When It Comes to Mortgages, and His Ability to See Outside of the Box to Find the Best Mortgage Deals Is Truly Impressive.

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Jason Stubbs
Equity Release Expert

Jason Stubbs Is a Specialist in the Equity Release Sector. He Enjoys Helping Older People Who Are Struggling Financially Get Out From Under Financial Pressure.

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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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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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Mark Patterson
Mortgage Expert

Mark Patterson is a well-known expert in mortgages. He has been working as an expert for over 15 years, and he specializes in the UK mortgage market.
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Katherine Read
Consumer Affairs Writer

She writes on the topics of equity release, home reversion, and mortgages.

Nicola Date

Nicola Date
Writer & Journalist

Nicola is a financial writer for EveryInvestor 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.