If you are looking to switch your equity release plan, Key could help.
What is equity release?
There are 2 types of equity release:
- Home reversions: Where you sell all or part of your property at less than its market value, to the reversion company in exchange for a cash lump sum
- Lifetime mortgage: A loan secured against your home
At Key we offer lifetime mortgages only, which is the most popular type of equity release. In this guide we will explain how you could change your lifetime mortgage plan.
Switching your lifetime mortgage plan
A lifetime mortgage plan is designed to run for the rest of your life, but that doesn’t mean you have to stay on the same plan or even with the same provider. Just as your own needs change, so does the equity release market meaning there could be a more suitable plan for your current needs.
Reasons to consider switching:
- Potential lower interest rates; you’ll accrue less interest on your loan over time, which means you could save thousands
- Plans with benefits that could better suit your needs
- Borrowing more if your house has increased in value
- Releasing further funds
- Borrowing more as you are now older
Securing a better interest rate
People who have taken out a lifetime mortgage in the past, may find their existing plan is now uncompetitive. By switching plans to a lower interest rate, not only could you save money – potentially thousands – it could also mean you could leave more inheritance for your loved ones or have further equity available in the future.
Accessing more money
If your financial situation has changed, unlocking more cash from your home could be an option if you switch your lifetime mortgage plan. Your house may have increased in value over time, meaning you could borrow more.
Find a plan that suits your needs
Your circumstances may have changed since you first took out equity release and it’s possible that a new plan could have features that better suit what you want or need.
If you are on a lump sum lifetime mortgage, there may be a chance to take out a drawdown lifetime mortgage instead with a smaller initial amount and the option to take out further sums in the future when you need it. To do this, the initial lump sum would need to repay the existing lifetime mortgage.
Your new plan could also include different features, including downsizing protection, to ensure it’s still right for your needs.
Next steps on switching your lifetime mortgage plan
You can find out if you can switch your plan without it costing you a penny by talking to one of our expert equity release advisers. All our equity release advice relates to our range of Key branded products only and our fixed advice fee of £899 is only payable on completion.
If you want to find out if switching your plan could benefit you, speak to one of our team today.
Things to consider:
- Key offer lifetime mortgages only, which is a loan secured against your home.
- Early repayment charges are a factor to consider when determining if re-mortgaging is appropriate.
- Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.