It’s a good time to release equity.
Wider choice and increased competition leading to value for money have been cited as reasons for a recent rise in activity in the Equity Release market. To compound this, interest rates on equity release products fell to a record low of 4.91% over the summer.
So, if you’re over 55, is now the time to consider applying to release equity from your property? The advice is, ask a specialist who can take the time to listen to what you need and explain the full range of possibilities on offer. To quote David Burrows, Chairman of the Equity Release Council, “Older homeowners considering equity release have never before had more choice and flexibility to meet their changing needs and their families.’
The growth of equity release options coincides with many opting to act as Bank of Mum and Dad in order to help younger generations gain their first steps on the housing ladder. Other solutions available to help the younger generation include acting as guarantors, re-mortgaging to raise funds and cashing in savings on second homes.
Others may simply be looking to the future. More plans relating to people in sheltered or age-restricted accommodation have come onto the market. Those wanting to protect their inheritance can now also choose products offering to ring-fence part of the value of their property for that purpose. Other growth areas include plans allowing smaller proportions of cash release and ones with guarantees against downsizing to avoid early repayment charges.
With the increased range of possibilities within this sector, there is an increased risk that it becomes trickier to pinpoint the best product for your needs. Whereas one plan may fulfil a requirement for inheritance protection, it may come at increased cost and another may allow flexible payments. It is always best to seek specialist advice and take the time to understand the options available to you.