Equity Release Interest Rates Are Some of the Lowest They’ve Ever Been

If you’re thinking about taking out an equity release loan against your home, there’s never been a better time to do it. Equity release interest rates have been falling year-on-year and are now the lowest they’ve ever been.

What Are the Equity Release Interest Rates?

Equity release interest rates are the lowest they’ve ever been, with a lifetime mortgage interest rate between 3% and 5%. While they may not fall any further, they already offer the best value since they were created.

Continue reading as we explain Equity Release interest rates in more detail.

Looking for other information on Equity Release? This guide has info on 'Are equity release rates falling?' We have also writen extensively about:

• - Are equity release schemes a good idea?
• - Is equity release a good or bad thing?
• - Can equity release be mis-sold?
• - Can equity release be paid off early?

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What Are the Typical Equity Release Interest Rates?

Right now, the interest rates on equity release loans are averaging around 4.5%, which is by far the lowest they’ve ever been. Depending on your circumstances, it’s possible to find equity release loans below 3%, although it all depends on how much money you want to borrow, how old you are, and various other factors with your loan.

There is concern that having reached this low point, the only way for the interest rates to move now is up. Some experts are of the belief that equity release interest rates could rise in the next couple of years, particularly with the uncertainty of the financial markets.

So, if you’re considering an equity release loan, now might be the best time to act.

Equity Release: How to Avoid Higher Interest?

If you want to pay less interest on your equity release loan, the best thing to do is delay your application – this means you’ll have fewer years in which interest can accrue and, since it compounds, you’ll be adding interest on top of interest. Yet rates could go up too, so applying now if you have plans for the money could be the most sensible way forward.

One solution is a drawdown scheme, where instead of taking the full cash lump sum upfront, you have a limit that you can essentially withdraw from. So while your equity release might grant you £60,000, you might only need £25,000 of that in the short-term.

You only build interest on the amount you’ve taken, so the longer you leave that remaining £35,000 untouched, the less interest you’ll accrue over the duration of the agreement.

Equity Release Loan and Interest Repayments

You could also consider an equity release loan that allows you to repay the interest. Not every plan will allow for this, so if it’s something you’re considering you’ll need to plan it with your financial adviser who can help you find a lender that permits it.

But by repaying the interest during your loan, your estate will only need to pay off the value of the initial loan itself.

With Equity Release low-interest rates, more and more people are taking out equity release loans. If you need to know more before you start, we’ve got a wealth of guides on every aspect of equity release to put your mind at ease, from eligibility to the process and time frames.

How Can Money Savings Advice Help You With Releasing Equity?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Equity Release brokers. They have already helped thousands of people get the best Equity Release deal and they can do the same for you.

Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.