When did you last review your equity release scheme?

Many retirees that have taken out an equity release scheme are unaware that you should review the plan. The majority will have a lifetime mortgage equity release scheme and as you would with any mortgage, you should review it periodically.

If your equity release scheme is a home reversion then it is less likely that you can do much about changing it. If on the other hand you have a lifetime mortgage then it will be linked to an interest rate. Just as with normal mortgages the interest rates published by lenders on equity release schemes can and do change frequently and you need to ensure that you are not paying more interest than you need to.

What are the advantages of reviewing my equity release scheme?

An an equity release scheme mortgage is linked to an interest rate, you may not make any monthly payments to the lender but you are being charged interest on the loan. The interest is rolled up on the loan and it is rolled up compound, this means you are being charged interest on interest.

You could save thousands of pounds by switching your equity release scheme to a new lender at a lower interest rate.

What are the disadvantages?

There may be an early redemption charge on redeeming the loan, so check with your existing lender. There will also be new costs/charges to bear for moving the loan to a new lender, again you need to check what these are.
An independent financial adviser that specialises in equity release schemes will be able to give you advice.

TO UNDERSTAND THE FEATURES AND RISKS ASK FOR A PERSONALISED ILLUSTRATION. AN EQUTY RELEASE PLAN WILL REDUCE THE VALUE OF YOUR ESTATE, WILL NOT BE SUITABLE FOR EVERYONE AND MAY AFFECT YOUR ENTITLEMENT TO STATE BENEFIT.