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Lower your Interest rate
Do you currently have an existing equity release plan, if so, ask yourself one question.
Have you ever had it reviewed?
Equity release plans have been in the Market Place for the last 15 years. In its early years the loan to values were quite low and interest rates were very high compared to today’s low fixed rates. The policies were also very inflexible.
Policies today in comparison are much more flexible. They allow you to be able to borrow the funds you require in a flexible approach with many new schemes on offer. Some Lenders will also allow partial repayment or even monthly repayments if required.
You may wish at this stage to remortgage for a lower rate but have no need for further funds, under draw down plans a further amount agreed on completion can be made available to borrow at any time in the future.
A review of your current Scheme is highly recommended to improve your current situation:
- Reduce your existing interest rate, save you or your beneficiaries a large amount of interest which will be added under your current arrangement.
- The loan to values under certain old plans were also a lot lower than under current plans. This means that although your loan is increasing as your age has, also you may be able to remortgage your equity release and borrow further funds at the same time.
- Newer schemes offering a flexible approach under a ‘Draw down’ Scheme.
- Improved terms and conditions.
Switch to an equity release scheme that is more competitive
Reduce the amount of interest that will accumulate in the future by mortgaging your property with an equity release scheme that is more competitive.
Below is a table which illustrates the potential savings to your estate based on a £70,000 loan.
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Loan Value
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Interest Rate
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Repayment Charges
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5 years
|
10 years
|
15years
|
| £70,000 |
8.20% |
£103,809
|
£153,947
|
£228,301
|
| £70,000 |
6.16% |
£94,384
|
£127,264
|
£171,597
|
| |
Save by switching
|
£9,425
|
£26,683
|
£56,704
|
Your current mortgage plan may have early repayment charges; however it could be more beneficial to change to an equity release plan with a lower interest rate. In summary, there are a number of benefits to reviewing your loan, reducing the interest rates, making your plan more flexible, borrowing further funds, partial repayment or monthly repayments. One of our Specialised Advisors will be happy to review your existing arrangements for free, and make some recommendations to you to show you how your current situation can be improved.
Contact us for more information
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