A recurring question from those making enquiries is whether it’s worth doing equity release now when interest rates are higher than they have been for a while, or waiting until they drop?

Interest rates are an important consideration when deciding whether to do equity release. If interest rates are high, it means the cost of borrowing money is also high. This can make equity release less attractive as the interest on the loan will accumulate faster over time and reduce the amount of equity in your home. It’s worth noting that interest rates are not the only factor to consider when deciding whether to do equity release. Your personal circumstances, financial goals, and the value of your home, may also play a role.

Most equity release products have early repayment charges and or other fees that may make it costly to remortgage or switch to a different product before the end of the term. Additionally, some equity release products have clauses that restrict your ability to remortgage or switch products altogether. Therefore, if you want to have the option to remortgage in the future, it’s important to carefully review the terms and conditions of any offer of loan with a qualified advisor and ensure the product offers the flexibility to remortgage in the future without excessive fees and costs when rates drop.

Here at Equity Release Scotland if interest rates drop significantly in the future and it makes financial sense to do so, we may recommend we review and remortgage your existing equity release product. Our goals in securing a lower interest rate will be to either 1) decreasing your monthly payments (if you are making some) or 2) reduce the total interest paid over the term of the loan. It’s important to weigh the potential benefits against the costs and fees associated with remortgaging or switching products. Our experienced, qualified advisors will explore and explain all the “what ifs” to you, to ensure you fully understand all your options.

Seek professional advice from a financial qualified advisor. They can help you understand the pros and cons and whether confirm it’s the right choice for you given your current financial situation and long-term goals.