Reviewing the Cost of Existing Equity Release Plans with Bower Retirement Services

ONGAR, ENGLAND, November 14, 2012 (Press-News.org) Interest rates could be on the way down, with many market analysts forecasting that the UK rate could drop to as low as 0.25% by the end of 2012. While the Bank of England has stated that it sees no benefit to dropping below the current level of 0.50%, market pressures could force its hand, or at the very least make it unlikely that it will rise above this level in the foreseeable future.

This has led equity release advice firm Bower Retirement Services to suggest that holders of equity release plans should consider switching to a different lender if they are to take full advantage of these conditions.

An equity release scheme is a method whereby you can release some of the equity in your home. There are various plans by which this can be achieved, such as lifetime mortgages, drawdown lifetime mortgages, interest only lifetime mortgages and home reversion plans. The loans do not normally have to be repaid until death or move into permanent long term care

These types of schemes can provide the financial freedom that many people crave in their retirement, or even before they retire. Holders of existing mortgages can take out an equity release mortgage to pay off the remainder of their mortgage, freeing them from monthly payments and often providing a welcome lump sum. This could be used to fund a more comfortable retirement. For example, it could allow the homeowner to afford more holidays, or to pay for a private health insurance plan.

If you already have an equity release plane, the downwards pressure on interest rates means that you could be stuck with an uncompetitive deal. This could mean that the debt will grow bigger than it needs to be. .

If you procured your equity release deal at a time when interest rates were a lot higher, such as before the financial crisis of 2007-8, then you may be surprised to find out just how much you could save by switching to a different provider. However, even those who took out equity release mortgages more recently could possibly make savings.

The majority of equity release mortgages have early repayment penalties, which may make it too expensive to switch lenders. However many plans have reasonable or even no early redemption penalties at all. In order to check if switching will save money, homeowners should seek independent advice from a specialist equity release adviser firm who will obtain cost comparisons from the whole equity release market.

Website: www.brsequity.co.uk