Is Equity Release Safe?

The facts and the myths.

Is Equity Release Safe?

The facts and the myths.

Is Equity Release Safe?

The facts and the myths.

Is Equity Release Safe?

The facts and the myths.

Is Equity Release Safe?

The facts and the myths.

Fixed or Variable

This is fundamental. You can choose a plan that has a fixed interest rate for life, or a plan that has a variable rate also for life.

The advantage of a fixed rate is there’s a known future cost and if rates go up, you’re locked in and not affected. The disadvantage is that if interest rates fall you’ll not take advantage of the drop. To reiterate, a fixed rate is for the life of the plan, not just limited terms as with conventional early life mortgages.

You can find some variable rate lifetime mortgage. The advantage of a variable rate is that if interest rates drop your plan could take advantage of that. If rates go up, then so will the rate charged on your plan. There’s a maximum rate chargeable that’s declared in the illustration document. In addition, variable rates may not be tied to the Bank of England Base rate. Future costs of your Lifetime mortgage are therefore unpredictable.

At the time of writing, July 2020, rates are at an all-time low.