Switching Equity Release Plans

Can You Switch Equity Release Plans in 2022?
Contributors: Nicola Date, Katherine Read. Edited by Rachel Wait & Reviewed by Francis Hui
Are You Considering Switching Equity Release Plans in 2022? Find Out When to Switch Plans & What Factors to Consider. Get All the Answers You Need Here.

A change is as good as a holiday, so get a break from inflated interest rates and look into switching your equity release plan today!

Interest rates have recently declined but are growing, and we can almost guarantee you’ll get a better rate if you switch equity release plans. 

Particularly if you unlocked equity before 2022.

Don’t stay locked into an outdated deal that’ll cost your family dearly in the future.

As experts in our field, we discuss the following in this article:

    Our panel of equity release researchers constantly studies the markets. We work tirelessly so that opportunities to save money don’t get missed by you, our reader.

    Find out how!

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    Why Switch Your Equity Release Plan?

    Switching your equity release plan will reduce the money that your estate will be liable for in the future when you pass on or move into permanent care.

    Let’s look at more reasons to switch.

    • Updated benefits – You can take advantage of newer plans with updated benefits, such as drawdown options and inheritance guarantees, allowing you to make repayments without early repayment charges.
    • Moving to a new home – Before you port your existing plan to your new home, it may be worth conducting a financial review to see if a newer plan would better fit your current needs and offer you better benefits.
    • Withdrawing more funds – even though the funds you withdraw from your drawdown plan are at current rates, your outstanding balance may be accumulating interest at an outdated, more expensive rate; it might be time to switch and save.
    • Saving money – As the equity release market has developed, newer plans have become available that offer free valuations with no application fees; these are available at lower interest rates. This will save your estate thousands in the long run.

    When Can You Switch to a New Equity Release Plan?

    You can only switch to a new equity release plan after your current plan has been in place for more than 12 months.

    Your financial adviser will be able to assist you when you look into switching.

    Benefits of Switching to an Alternative Equity Release Plan

    The benefits of switching to an alternative equity release plan are that you could save with a better interest rate, get access to more money and find a more flexible plan to suit your needs.

    You can also take advantage of your property value if it’s increased, save money following a life event and get the guaranteed right to make voluntary repayments.

    Here’s more information.

    Save With a Better Interest Rate

    If your equity release plan was taken out a few years back, it could possibly be accumulating interest at outdated rates.

    You can contact your financial adviser and look into switching to a new plan with a much lower interest rate which will save your estate significantly in the future.

    Access More Money

    You may need to access more money; this could be possible by switching plans.

    Your financial adviser will be best suited to look into this for you.

    Find a More Flexible Plan

    When you took out your equity release plan a few years back, it may have been a basic lump sum lifetime mortgage without many benefits.

    Your financial circumstances may also have changed, and a newer plan may better suit your current situation.

    Today’s products offer features like drawdown options and interest repayment allowances that save you money in the long run and provide more flexibility.

    Take Advantage of Your Property Value

    If your equity release plan has been in place for some time, your property value may have increased considerably since you took it out.

    You could access more cash by getting a new plan and taking advantage of your home’s higher market value while benefiting from new features like downsizing protection.

    Save Following a Life Event

    If your health has taken a turn for the worse and you need access to more capital to cater for your care, a new plan could help you do that.

    Newer plans take ill-health into account and may allow you to release a greater percentage of your home’s equity owing to your health concerns.

    Guaranteed Repayments

    On 31 March 2022, the Equity Release Council1 announced that all borrowers using equity release have the right to make voluntary repayments on their loan and interest at any time.

    Certain providers allow up to 40% of the interest portion to be repaid annually; it might be time to take advantage of this and the lower interest rates on offer.

    Before You Continue Reading….

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    What Factors Do I Need to Consider?

    Factors you need to consider when switching equity release are what valuation charges will be and what new charges will total when switching.

    You should also consider if you’ll be liable for any added interest or early repayment charges and ensure that your new plan will meet Equity Release Council Standards.

    Let’s unpack these for you.

    Valuation Charges

    While some providers offer a free valuation, others do charge you for a valuation, and you’ll be liable for the surveyor charges right after your property valuation is conducted.

    New Charges

    Applying for a new plan might lead to new charges that you were initially unaware of; it’s best to factor in an amount for unexpected costs.

    Added Interest

    While you’re busy with your plan switch, legally, your current plan is still in place, and you’ll still accrue this interest and be liable for its charges.

    Your financial adviser will help you plan for all these costs.

    Early Repayment Charges (ERCs)

    If your equity release plan is one of the older ones that were on the market a few years back, you may be liable for early repayment charges.

    It’s best to factor this in when planning for costs; your adviser will be able to tell you exactly what’s involved.

    Equity Release Council Standards

    The new plan you choose will have to meet Equity Release Council Standards. 

    Your financial adviser will be best to chat with regarding this requirement.

    Am I Eligible to Switch Equity Release Plans?

    You’re eligible to switch equity release plans if your current plan has been in place for 12 months or longer.

    Talk to your adviser for further assistance with your eligibility to switch plans.

    How Do I Switch Equity Release Plans?

    To switch equity release plans, you’ll need to get in touch with your financial adviser and let them know that you want to look into making a change.

    They’ll be able to advise you and discuss the options available to you along with all the details you need to consider when switching equity release plans.

    Common Questions

    Can I Change My Equity Release Provider?

    Can You Take Out Equity Release Plans More Than Once?

    What Happens if My Equity Release Provider Goes Bust?

    Can I Change My Equity Release Plan?

    Can You Get Out of Equity Release?

    Can I Switch My Equity Release Plan to a New Home?


    Switching equity release plans is possible and may be in your favour.

    It’s always best to chat with your financial adviser and get the most up-to-date market advice before making any financial decisions.

    With interest rates currently at a low point, switching equity release plans could really save you some money.

    How Much Can You Release?

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