Compare equity release interest rates 

Whether you are new to equity release and are interested in how it could potentially benefit your life, or you already have a plan in place and are looking to switch providers, we are here to help!  

At Bower Home Finance, we search the whole market and compare equity release rates and incentives from all lenders to find the very best deals for our customers. 

If you are looking to release some much-needed tax free cash to do with as you wish or are in search of a better equity release deal than the one you currently have, trust our experts to compare equity release interest rates, deals and plans for you. 

Understanding equity release 

Equity release offers homeowners a way to release tied up cash from their property without needing to move out or downsize to a smaller property. Equity release loans offer a flexible financial solution, allowing borrowers to access funds without the affordability checks associated with traditional loans.  

Whilst equity release has an eligibility criteria, it is typically available to those aged 55 or older, with a minimum property value of £70,000. The two main types of equity release are lifetime mortgages and home reversion plans, each allowing you to remain in your home rent-free until the last applicant passes away or moves into long-term care.  

What is Equity Release? 

Equity release is a financial solution that allows homeowners to access a portion of the value of their property, typically in the form of a lump sum or regular payments. This can be done through a lifetime mortgage or home reversion plan and is usually available to homeowners aged 55 or older. Equity release can be used for a variety of purposes, such as paying off debts, funding home improvements, or supplementing retirement income. 

How Equity Release Works 

Equity release allows homeowners to release tax free cash stored in their home through a lifetime mortgage or home reversion plan.  

A lifetime mortgage involves borrowing money against the value of their property. The amount borrowed is typically a percentage of the property’s value, and the interest rate is usually fixed. The borrower can choose to make monthly payments or allow the interest to roll up over time, with the loan being repaid when the property is sold, or the borrower passes away. 

In comparison, a home reversion plan allows homeowners to sell part or all of their property at a discounted price to a provider, in return for a tax-free lump sum or drawdown and the right to remain in the home rent-free until the plan ends. A home reversion plan will be repaid when the last surviving owner passes away or moves into long-term care, often through the sale of the home where the provider will reclaim the percentage sold previously at market value.  

Equity release plans can be tailored to individual circumstances and will come with a range of safeguards as part of the Equity Release Council’s Standards, including the right to remain in your property for life or until you need to move into long-term care, provided the property remains your main residence and you abide by the terms and conditions of your contract. 

How much does equity release cost? 

If you are considering equity release, you will need to understand any upfront fees of equity release and the long-term cost to your estate.  

Some of the initial equity release costs include arrangement fees, advice fees and solicitor fees, each of which will vary depending on the type of equity release plan you choose to proceed with and from whom you seek advice. At Bower Home Finance, we offer no-obligation, whole of market independent advice, so you can understand your options across the market. If you choose to proceed with equity release, our advisers will work closely with you to help secure the lowest cost and best product for your circumstances. 

The total cost of your equity release loan will depend on the type of equity release plan. If you have a lifetime mortgage, this will be determined by how much equity you release, whether you pay some or all of the interest on your plan each month and the duration of your equity release. In comparison, if you use a home reversion plan to release equity from your home, the cost will be reflected in the percentage of your property the provider will reclaim when the plan ends.  

It is important to seek advice from a qualified, independent equity release adviser so you can be matched with the best plan and interest rates for your circumstances.  

Learn more about the cost of equity release. 

Lifetime Mortgage Interest Rates 

Lifetime mortgage interest rates will vary between lenders and products, and finding the right product to match your circumstances with the best equity release interest rates can have a significant impact on the amount of interest you accrue over time, saving you thousands of pounds over time.  

At Bower Home Finance, our specialist equity release advisers will compare equity release interest rates across the whole of the market to find you the best deal and explain the cost to you over the lifetime of the plan with a personalised illustration.  

What is compound interest? 

Compound interest means the lender charges interest on the total amount of the loan – including any interest that has built up since the equity was released. The interest rate on your lifetime mortgage will help determine how much interest will compound and how much you could pay if you wish to reduce this.  

The interest rate on your lifetime mortgage is a key factor in comparing your options, as interest rates vary by provider and personal circumstances. This can lead to a significant increase in the amount owed over time if no repayments are made. Understanding how lifetime mortgage rates work is crucial to making an informed decision. 

Fixed interest rate equity release interest rates 

Whilst equity release interest rates vary between lenders, the main type of interest rate available is a fixed rate.  

A fixed rate is the most common type of equity release interest rate that will be offered with most lump sum lifetime mortgages. This will mean your interest rate will remain the same throughout the lifetime of your loan, allowing you to look ahead and understand exactly how much interest you will be paying. 

Factors Affecting Equity Release Rates 

Equity release rates are influenced by a range of factors, including the borrower’s age, property value, if you wish to make a contribution towards the monthly cost, health, and personal circumstances. The interest rate offered by lenders will also depend on market conditions, and the overall state of the economy. Additionally, the type of equity release plan chosen can affect the interest rate, with lifetime mortgages typically offering lower rates than home reversion plans. 

Equity Release Mortgage Comparison 

The Lifetime Mortgages shown in the comparison table above are just a small selection of plans from the whole of the market as there are simply too many to list here. Advice and support from knowledgeable experts and the proper research will help to guide you through the process and lead to the right plan to best suit your needs. 

Please note the interest rates displayed in the table above are just a guide and the actual interest rates available to you will depend on your personal circumstances. 

Reducing the Cost of Equity Release 

There are several ways to reduce the cost of a lifetime mortgage, including: 

• Choosing a plan with a lower interest rate 
• Making regular payments to reduce the amount borrowed 
• Using a drawdown facility to only borrow what is needed. 
• Seeking whole of market advice to help find you the best rates and terms for your circumstances. 

Equity Release Calculator and Tools 

An equity release calculator can be a useful tool for homeowners considering equity release. These calculators can provide an estimate of how much equity can be released, based on the property’s value and the borrower’s age. They can also help to illustrate the potential costs and benefits of equity release and provide a comparison of different plans and lenders. 

Using an Equity Release Calculator 

When using an equity release calculator, it is essential to provide accurate information about the property and your circumstances. This will ensure that the estimate provided is as accurate as possible.  

An equity release calculator will take into consideration your property value and any outstanding debts to calculate how much equity in your property is available to release; it is important to seek advice from a qualified professional for more in-depth advice that considers your personal circumstances.  

Finding the right equity release provider 

With a wide range of equity release providers offering different plans, it can be difficult to navigate through them all without expert advice and guidance.  

At Bower Home Finance, our team of qualified equity release specialists are on hand to assess and evaluate your individual circumstances and compare equity release plans relevant to you from the whole of the market, to find the right fit for your needs. 

If a lifetime mortgage is right for your circumstances, a qualified whole of market equity release specialist could potentially save you thousands of pounds in fees or interest over the lifetime of the plan by comparing every plan on the market.  

Your adviser will help determine which plan suits your circumstances through a range of features including:  

• Which interest rates are available, you may be given a more beneficial interest rate if you have poor health or meet some of the lenders lifestyle factors. This can also increase the amount available to borrow.  
• Low early repayment charges, or early repayment charges that end after some time so you can make payments towards your lifetime mortgage to reduce the interest without additional charges. 
• Free property valuations 
• Downsizing protection 
• Inheritance protection if you plan to ring fence part of your estate. 
• Plans that accommodate paying some or all the interest. 

At Bower Home Finance, our team of specialist advisers will find out everything you require before making any recommendation, helping us to make an informed recommendation surrounding which plans will benefit you.  

Learn more about finding the right equity release provider. 

Independent equity release advice you can trust 

As independent equity release advisers, we provide impartial, whole of market advice you can trust. Our professional team are dedicated to delivering open, honest, clear, objective and unbiased advice in order to help customers make smart, informed decisions that are best for their individual circumstances. 

Releasing equity from your home is a significant financial decision, and seeking professional advice can help you navigate the complexities and find the best plan for your needs. 

At Bower Home Finance, we work hard with all of the equity release companies in the market to ensure that our clients’ needs are met. Our experienced and highly qualified advisers work for you so that you have the best plan on the market that suits your requirements. All equity release plans require a qualified and authorised person to give advice before a plan can be taken out. 

Get started today by finding out how much equity you could release from your home with our free online equity release calculator, or request a callback from one of our equity release specialists today.