If I Use Equity Release, Can I Move House?
Question asked by Mrs A Kowalczyk
Can I repay Equity Release before my death? I understand that Equity Release usually lasts until you pass away, but I was wondering if I could repay my Lifetime Mortgage early if I wanted to?
If you’re considering paying Equity Release early, you may want to ask yourself if releasing equity from your home is the right option for you in the first place.
Equity Release is typically designed to be a long-term financial solution lasting, as you say, until you pass away or move into long-term care.
Most Equity Release Lifetime Mortgage providers will levy an early repayment charge if you want to come out of your agreement early, which could potentially be costly.
If repaying the Lifetime Mortgage in the future is important to you, our Equity Release partner has exclusive access to lenders which offer plans with fixed and defined early repayment charges.
Meanwhile, if you want to come out of a Home Reversion Plan early you typically have to buy back the share of the home you sold.
Doing so can also be expensive because you will receive less than the market rate for the proportion of the home you sold initially. However, you’ll usually have to buy it back for the current sale price on the open market.
If you think you might repay your Equity Release plan at some point in the future, it’s important that you mention this to your financial adviser at the outset.
This will change their assessment of the most appropriate Equity Release products for you. It is possible to get Equity Release without early repayment charges, but not all providers offer this as an option. Speaking to an independent adviser may be able to help you find one that does.
Note that Equity Release will reduce the value of your estate and could impact your eligibility for certain means-tested state benefits.