In a move that is being seen as a victory for equity release customers, the Equity Release Council has announced that partial penalty-free repayments will now be standard for all customers from March 2022 onwards. This means that people who take out an equity release plan will be able to make voluntary repayments without having to worry about incurring penalties. This is great news for people who want to stay in control of their finances and ensure that they are able to make the most of their money.
What is equity release and what are the benefits of it for homeowners over 55 years old?
Equity release is a way for homeowners over the age of 55 to access the equity in their home without having to sell up and move out. There are two main types of equity release: lifetime mortgages and home reversion plans.
Lifetime mortgages allow you to borrow a lump sum or take regular smaller amounts against the value of your property. The loan, plus interest, is repaid when your property is sold after you die or go into long-term care. Home reversion plans involve selling all or part of your property to a provider in return for a lump sum or regular income payments. As with lifetime mortgages, the loan is repaid when your property is sold after you die or go into long-term care.
What is the Equity Release Council (ERC)?
The Equity Release Council (ERC) is the UK’s main trade body for equity release. It works to promote best practice and consumer protection in the industry, and its members must adhere to a strict code of conduct. The ERC also provides information and advice for consumers considering equity release.
What are the benefits of taking out an equity release plan?
Equity release can be a great way to boost your retirement income, make home improvements or pay off debts. It can also give you greater financial security by freeing up money that would otherwise be tied up in your property. And with new plans now offering more flexibility, you can even choose how and when you make repayments – giving you more control over your finances in retirement.
If you’re thinking about taking out an equity release plan, make sure you get advice from a suitably qualified adviser to ensure it meets your needs and circumstances. You can also find more information and guidance on the Equity Release Council website.
If you’re considering releasing equity from your home, make sure you seek professional advice to ensure it is the right decision for you. And remember – with new plans now offering more flexibility, you can choose how and when you repay the money, so you can stay in control of your finances in retirement.
The Equity Release Council has announced that partial penalty-free repayments will now be standard for all customers.
Meaning those who take out an equity release plan can make voluntary repayments without having to worry about incurring penalties. This is great news for people who want to stay in control of their finances and ensure that they are able to make the most of their money.
If you’re considering releasing equity from your home, the Equity Release Council website is a great place to start for information and guidance. You can also speak to a suitably qualified adviser to discuss your options and find the best plan for your needs and circumstances. To be a member all equity release companies will need to adhere to these new rules from March 2022 onwards.
This change comes after the Financial Conduct Authority (FCA) found that some lenders were not adhering to their standards.
It found that customers were being charged unfair penalties for overpaying or repaying their loans early.
The new rules state that any customer who takes out an equity release plan on or after the 22nd March 2022 will not be charged any penalties for making partial voluntary repayments. This is great news for those of us who want to have greater control over our finances in retirement.
If you’re considering releasing equity from your home, make sure you seek professional advice to ensure it is the right decision for you. And remember – with new plans now offering more flexibility, you can choose how and when you repay the money, so you can stay in control of your finances in retirement.
Customers who have already taken out a product with a lender that does not adhere to the new rules might be allowed to switch without incurring any early repayment charges.
The changes will come into effect from March 2022, giving customers more choice and flexibility when it comes to equity release.
The possibility of being able to make partial repayments penalty fee might now be a reality but this will depend on the equity release company. It might be worth contacting an equity release adviser to find out if you can.
Equity Release Council makes penalty-free repayments standard following an industry-wide review The changes will come into effect from March 2022, giving customers more choice and flexibility
This announcement is good news for retirees who want to stay in their homes and still have some money left over each month.
With the new rules in place, they can choose to repay a portion of their loan each month without having to worry about any penalties. This extra flexibility will go a long way in giving peace of mind to those who are considering equity release as an option.
How will this change impact current and future equity release customers?
The changes will come into effect from April March 2022, giving customers more choice and flexibility when it comes to equity release.
It’s important to do your research before choosing a lender, as there are many different products available on the market.
Make sure you talk to a financial advisor to find the best option for you and your circumstances. With these changes in place, equity release can be a great way to supplement your retirement income and give you the flexibility you need in retirement.
Current and future customers may benefit from these changes, as they will now have more choice and flexibility when it comes to their equity release product. . If you’re thinking about taking out an equity release product, make sure you choose a lender that adheres to the new rules!
