What interest rates are payable on an Equity Release plan?
There is no one interest rate for an Equity Release plan. There are over 400 different equity release plans and features currently available. With such a variety the actual interest rate you could pay will vary depending on which options you take and how much you borrow.
Most interest rates are fixed for life.
The actual interest rate you pay may vary from one plan to another, but in most cases the interest rate will be fixed for life and will never change. Interest rates currently vary from between 2.34% to 6.99%. The rate you pay will be dependent on the amount you take compared to the value of your property. This is called the loan to value ratio. The higher the loan amount compared to the value of your home, the higher the ratio and the higher the interest rate.
Lowest may not always be best
There are other features and options that can be added to the plan that will increase the interest rate. The interest rate is not always the most important part of selecting or recommending an Equity Release plan. If there is an essential feature you require then it may be beneficial to pay a slightly higher interest rate.
Some providers offer variable interest rates which work in a similar way to the interest rates on traditional mortgages. You may be offered a discounted rate for the first couple of years, but the rate will change back to the standard variable rate, which will be higher and if interest rates have risen sharply could be considerably higher than a fixed rate.
When looking at Equity Release you need to look beyond the interest rate. At Your Time Equity Release we look at all the options, all the interest rates and make sure we only recommend a plan that suits your needs now and also in the future.
Find out how much you can release and get example interest rates
Why not use our Cash Calculator today to find out how much you could release. We will then send you information giving you example interest rates based on your age, house value and how much you could release.
Call us on 0800 612 51125 to discuss interest rates or request a call back.
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