Interest rates may have fallen recently, but does this mean equity release rates will decrease too? Mark Gregory offers his expert advice to a reader considering a product switch
The Question
With interest rates looking likely to fall in 2025, I wondered whether this might impact equity release rates? If so, would it be worth my while refinancing to a cheaper deal?
I took my plan out 18 months ago so would be keen to understand my options – if refinancing is available to me.
Mark’s Answer
Thank you for your question, and I can confirm that during my 20 plus years of experience in the equity release market, I have witnessed the interest rate ‘yo-yo’ several times, hitting historic lows and then increasing again in-line with long-term financial markets.
However, as you are aware, you have purchased a long-term Lifetime mortgage and with this comes a lifetime fixed interest rate which is just one of the many features of the plan.
Other features include making voluntary or regular payments, compassionate early repayment charges, downsizing protection, inheritance protection, plus any existing early repayment charges are equally important.
For interest, most Lifetime mortgage lenders use government gilts as reference point to how they set their products interest rates. Therefore, any Bank of England base rate changes do not have any direct effect on equity release interest rates.
Like all financial products, reviewing your existing mortgage and linking the features and benefits you want and need against current interest rates may be beneficial for you. Hence, I would suggest that you have a no obligation review with one of our Equity Release Supermarket whole of market advisers.
The benefit for you is that one of our advisers will complete a full review of your existing lifetime mortgage and then advise you on the best solution for the future, based on current interest rates and after assessing your existing plan.
If a lower interest rate is available, they would still assess whether it’s viable to switch bearing in mind any existing early repayments charges, plus the set up costs for the potentially new plan.
Furthermore, they will not charge you for a review unless they recommend you remortgage to secure a lower interest rate, or enhanced features and you accept their advice. If there is no benefit for you to re-mortgage at this time, rest assured, you will not be charged a fee, so please take advantage of this no obligation equity release review service.
Meet our expert…
Mark Gregory, founder and CEO of Equity Release Supermarket, is here to answer your questions. Mark is an adviser himself with over 20 years equity release experience.
He launched Equity Release Supermarket 10 years ago and it has grown to become one of the UK’s leading equity release specialists.
Email kate.saines@emap.com to ask Mark a question
