If you have an Equity Release plan in place, you may wonder whether it is possible to switch it to a different plan or provider. It may be that you want to explore different options offered by alternate providers, or look to switch the type of plan you have entirely. We’ll answer some of the most important questions in this article.
Yes, you can switch a Lifetime Mortgage Equity Release plan if you wish to try and secure a better deal in terms of lower interest rates or gaining additional benefits. It differs from porting your mortgage or plan, which happens if you decide to move home and want to transfer your mortgage or Equity Release plan to the new property.
Yes, a Lifetime Mortgage Equity Release plan may be transferable to another property subject to the providers criteria, however you may be better off to repay the old mortgage and take a new one out. Bower gives whole of market lifetime mortgage advice and can advise if this is the best option for you. For example, a new plan may allow you access to more money, a lower interest rate, or new features that your existing plan does not provide.
Yes, you can choose a new lifetime mortgage plan via an alternative provider if you feel there will be advantages that you do not get with your existing plan, as mentioned above. You may be able to shop around different lenders to see whether there are any better deals on the market, or a plan that suits a change in circumstances that occurred since you started your original plan. This may include making over payments on your plan or having more flexibility with a plan.
The one major drawback to changing your Equity Release provider is that you may be subject to an early repayment charge in order to get out of your existing plan. These repayment charges can be significant, depending on the type of plan you have and how long you have had it. Another downside is that switching plans is not free and you will need to pay financial advice and solicitor fees to move over.
If you have a Lifetime Mortgage, which is the most popular type of Equity Release plan, you can make overpayments if you want to cut down the amount of debt that will be payable after you pass away. You could also pay off the entire loan with the sale of your house, but again you may be subject to early repayment charges; depending on which plan you have (fixed or variable) and the amount of time you’ve had the loan. Or, you may be able to pay off a certain percentage amount each year without being subject to fees.
