Equity release borrowers could save a significant amount of money in interest costs by switching to a different product with a lower interest rate.
The average fixed rate for equity release has dropped from 7% to 4.27% in the last 10 years, with some rates plummeting as low as just 2.6% as competition soars. What’s more, some of the lowest fixed rates available for equity release have been even more competitive than a standard five-year fixed remortgage.
These record low rates represent a substantial opportunity for those who have already taken out an equity release loan, when rates were much higher, to save thousands of pounds. Borrowers can seize the chance to switch to a different product and/or lender to, not only save money in interest costs, but also benefit from the enhanced choice and flexibility of products that are now available.
Why remortgage your equity release loan?
There are huge benefits to be gained through an equity release remortgage both in the short term and the long term. Some borrowers could save tens of thousands of pounds in interest costs over the duration of their loan. Here are just some of the reasons why borrowers may consider remortgaging:
- Significantly reduce your debt and interest costs
- Protect the value of your property and retain more equity
- Protect the value of your estate and leave more to your loved ones
- If you’re making monthly or annual interest repayments you could increase your disposable income
What’s more, by protecting the value of your property, you can increase the likelihood of being able to borrow more money in the future if required.
Some considerations of remortgaging
The equity release sector has evolved significantly in recent years with ever-changing rules and regulations along with a multitude of new products to meet growing demand. While there is more flexibility than ever before, the suitability criteria have tightened and so you will need to check which products you qualify for.
In some cases, you may be liable to pay an early repayment charge (ERC) to your lender, although the total savings to be had could still outweigh the costs of switching to a different product and/or lender.
If you would like to learn more about an equity release remortgage and to discuss your options, please call Barry Leigh, one of our Equity Release Specialists, on 07980210953 or email email@example.com.
If you’re a financial or legal professional looking for advice on behalf of your clients, please get in touch with Barry Leigh. You may also be interested in our information pack to learn more about our referral partnerships.