As we approach the end of what has been a momentous year for the Equity Release market which has seen the launch of a new governing body it is worth reflecting how the market has changed over the course of the last year. The Equity Release Council has been established to promote Equity Release as a more established solution to help people in retirement. Please find detailed below a brief synopsis of how the market has changed:
- Interest Rates have steadily reduced to the point where the best rate we have seen in the market this year is 5.68% which is significantly better than the lowest rate in 2011.
- There are more options for Interest Only Lifetime Mortgages which in 2013 could well be much more attractive to customers particularly with the reluctance of mainstream lenders to now offer Interest Only loans.
- Traditionally with Equity Release, early repayment charges can be very penal however there are lenders now who will allow a percentage repayment each year without penalty and also after a qualifying period allow you to move and pay off with out penalty.
- There are more lenders now offering higher loan to values for people wishing to maximise the amount they release.
- As lenders compete for business they are offering free valuations and cash backs on completion in an attempt to win business.
- More lenders are offering drawdown facilities with higher levels of reserve for the customer to take after the initial cash sum.
As you can clearly see the Equity Release Market is in good shape which means that the products available are much more likely to meet the needs of potential clients as we move into 2013. There are alternatives to raising funds through Equity Release such as downsizing, using savings, funds from family, state benefits or grants which I always investigate first as these options if possible usually represent the best way forward. I am finding more and more that people want to stay in their home because either of the emotional attachment or their fear of losing significant funds on a house move now. They can take Equity Release now and move later taking the plan with them.
With the difficult times continuing into 2013, equity release could well be a help in 2013 for many people. If you have a possible case you wish to discuss or simply would like some advice. Please contact me either on 01704-512120 or 07714-414545. Finally I would like to wish you all the very best for the forthcoming festive season and best wishes to make 2013 the best year ever.
Steve Harrison CeMAP, CeRER
Equity Release Consultant