Switching equity release providers

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If you’ve already released equity from your home with a lifetime mortgage, you may be interested to know that you can change your provider, just like you would a traditional mortgage.

Switching equity release provider and transferring to a better interest rate could save you money but there are other reasons people choose to change lender.

The following information explains why people switch, how to go about changing your lender and important points you may want to consider.

Why should I change my equity release provider?

Homeowners have been releasing equity from their homes with lifetime mortgages for many years. Throughout this time, there has been a great deal of change. Regulation and controls have improved, interest rates have fluctuated, plans have developed in terms of flexibility and house prices have risen.

So, the plan you put in place years ago may not necessarily be the right one for you now.

Reasons to consider changing equity release provider

Switch to save money with a better interest rate

If the interest rate on your lifetime mortgage is quite high, you may want to change your equity release provider to move to a lower rate. Switching to a better equity release interest rate could save you thousands of pounds on interest when it’s comes to repaying the loan.

And reducing the cost of borrowing this way means there could be more for your family to inherit when the time comes.

See latest rates

Switch to release more equity

Switching equity release provider could mean you are able to release more equity from your home. House prices have risen quite dramatically over recent years so there may be far more equity tied up in your home for you to unlock.

Also, if you have experienced any health issues, you may be eligible for better deals with an enhanced lifetime mortgage, allowing you to release more money from your property.

Switch to get greater flexibility

Lifetime mortgages have developed over the years and now offer homeowners greater flexibility. Some plans give you the option to repay some or all of the interest, keeping your borrowing costs to a minimum. Others offer downsizing protection, allowing you to downsize to a smaller property without penalty.

And if leaving money to family is important to you, inheritance protection lets you protect a percentage of your property value, guaranteeing an inheritance for family.

So, changing equity release provider could give you the opportunity to choose a more flexible plan that is tailored to better suit your needs.

Switch to move home

If you are considering moving home, you may choose to switch plans to a new lender rather than take your existing plan with you. There are pros and cons with each option which are explained further in our guide to selling your house with equity release.

switching equity release compainesCan I transfer my equity release to another provider?

Changing equity release providers is similar to remortgaging your property with a traditional mortgage. Firstly, to ensure you make the right choices, it may help to get advice from a specialist IFA or equity release broker.

They will look at your current lifetime mortgage and review how much you owe, if you are able to switch and whether you will incur any early repayment charges.

They can then compare lifetime mortgage interest rates and deals to see if it is worth changing lender.

Switching equity release provider – 5 things you should know

Switching equity release could be a good idea if it saves you money or gives you the additional funds you require. However, there are certain factors you should take into consideration which may mean staying put could be a better decision financially.

  1. Can you switch? – will your lender will allow you to change provider?
  2. Is there an early repayment charge? – Will you face any charges by ending your agreement early?
  3. What are the switching costs? – What will the associated switching costs amount to? These could include application and legal fees plus charges for the valuation and professional advice.
  4. Is the return worth it? – Considering the costs associated with switching, at what point will you start saving money and how much will it amount to over the years. Martin Lewis equity release switching calculator can help you compare the cost of your current lifetime mortgage against switching to a new one.
  5. Is equity release safe? – To be sure you are protected, check your new provider is authorised by the Financial Conduct Authority and a member of the Equity Release Council.

As mentioned, a specialist IFA or broker will be able to help with all of these questions and advise you on the best course of action. So, if you are thinking about switching, help is on hand.

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