Over the past four years the average equity release has fallen by 1.14% so that it is now on average cheaper to take out an equity release than it was in 2016. While this is good news for those currently considering releasing equity from their home, for those who took out an equity release plan some years ago it may be disappointing reading. Fortunately, there is the possibility of remortgaging equity release, which could result in a lower, cheaper rate. Below we take a look at whether now is a good time to remortgage your equity release.
Since 2016 the average equity release rate has fallen from 5.35% to stand at 4.21% today. As the below table shows, average equity release rates have been falling consistently year-on-year over the past four years. In addition to this, as we reported earlier this week, research from Key Partnership found that competition within the equity release market is increasing and this year has seen a new equity release product being launched every 28 hours.
|Average equity release rates
|Lifetime equity release combined (fixed and variable)
The fall in rates combined with the increase in equity release competition means that those looking to remortgage equity release now are likely to get a better deal than if they did so just a few years ago. This could also mean that, depending on the rate of their initial equity release, they could be able to get a remortgage equity release deal that results in paying a lower rate. Additionally, with new products entering the market offering enhanced product features, those with an equity release could find that there are now more options that suit their personal circumstances than when they initially took out equity release.
Saying this, there are many factors to consider, and costs to be included, when looking to remortgage an equity release. For example, those with an equity release deal could find that they have to pay a significant amount of money to exit their existing deal and remortgage with a new equity release – the cost of this could outweigh the lower rates being offered on the new equity release deal.
Despite the numerous benefits equity release can offer it is important that independent financial advice is sought to ensure the costs and implications are understood fully. In addition to this, speaking to an equity release adviser may be a good option to help those looking to remortgage equity release to find the right deal for their circumstances.