For people who took out an equity release scheme several years ago, the increased competition in the industry has made the possibility of an equity release remortgage an attractive prospect. However, there are a number of factors which should be considered.

Why an equity release remortgage may be a good idea
There have been many changes in the equity release industry in the last few years which could make an equity release remortgage a good idea. There has been increasing regulation throughout the equity release industry which has placed more pressure on providers to supply a more varied and attractive range of schemes and products.
Also, in the early days of equity release, there were relatively few providers offering schemes. This has changed a great deal in the last few years with more financial institutions launching equity release products to meet the increased demand in the market. This increased competition has forced the financial institutions to create schemes which are very attractive. Obviously, if you took out an equity release scheme several years ago, your current scheme may not seem to match up to the rates and terms offered on current products. This can make an equity release remortgage a good proposition to investigate.

Checking if an equity release remortgage is a good idea for you
Before you consider an equity release remortgage, you will need to check the details of your current equity release scheme. Your existing plan may have some very comprehensive terms and conditions which may restrict the option of remortgaging. For example, as most equity release schemes were designed to be a lifetime plan, there may be an early repayment charge which would be applied in the event that you remortgaged. Some of these charges can be quite excessive and add up to one or two percent of the loan balance. This can be a significant sum, which may mean that you would not enjoy any savings by switching to an equity release remortgage. In order to determine whether this is a feasible option, you will need to assess any financial implications of switching and see if they are outweighed by the benefits offered by the new scheme. In some cases, speaking to your current provider to see if there is an alternative plan available to you from their product range, could mean you receive an attractive deal in order to retain your custom.

Another factor to consider is whether the value of your property would affect you taking on an equity release remortgage. The housing market in the UK has seen a number of peaks and falls over the last decade and if you took out your scheme at a time when prices were high, you may not have sufficient equity in the current value to warrant a new scheme. All equity release providers work to a loan to value ratio, so if your property would no longer command the level of price in today’s market, you may have difficulty meeting this ratio. However, there will be other factors which would come into play, for example, you would obviously be several years older than when you originally took out a scheme, which would mean that you may be offered a greater percentage of release now.

Checking the options
If you are considering an equity release remortgage, it is important that check all the options which are available to you. It is a good idea to speak to your current provider and consult with an experienced equity release specialist adviser. However, if you are simply interested in ascertaining whether it is feasible, you could make use of the online calculator tools which are available on equity release broker and company websites. This can provide a good insight into the figures which would apply and whether an equity release remortgage would release sufficient funds to cover the balance of the current loan and any penalties which may be applied. You may even be able to receive an additional lump sum, which along with a more attractive interest rate, would make remortgaging a very good deal.

If you are considering an equity release remortgage, it is important to obtain full information as to whether it is viable and would be financially beneficial. You will need to fully investigate the financial implications of early repayment of your existing scheme and determine whether a new equity release scheme would release sufficient funds for your financial commitment and other requirements. If remortgaging is a serious consideration, you should consult an equity release adviser for specific information about your particular circumstances.