You have a simple question: can you pay off equity release early?
Technically the answer is yes, you can. But whether or not it makes financial sense to do so depends on the type of equity release product that you are working with.
Can you pay off equity release early? Yes, you can…
Contrary to what some people think, it is possible to find equity release lenders that give you the option of repaying your funds early without incurring charges. The best way to find these lenders is with the help of an independent financial adviser. However it’s far more common for equity release lenders to levy charges on you if you attempt to repay your funds early. And that can get expensive unless you are careful.
Watch out for early repayment charges
Sometimes financial circumstances change. But leaving your equity release agreement early can incur high fees. Essentially when you attempt to repay early, you will be charged two fees. First there will be the interest on your borrowing. And secondly your lender will most likely charge an early repayment fee – most likely extending to several thousand pounds. Without doing so, your lender may lose money on the funds that they released for you.
A few words of wisdom can make all the difference
Seeking the opinion of an experienced independent financial adviser has two benefits. Firstly it allows you to find the best equity release deals for your personal circumstances – whether you are looking for a lender that waives early repayment charges or otherwise.
Alternatively if you are already locked in to an equity release plan and are now looking to repay the funds, a good financial adviser will be able to discuss your options to find out what’s best for your long-term financial security.
As experts in wealth management, Prydis has helped thousands of savers secure their financial futures. We can do the same for you. Get in touch to arrange a free consultation – either over the phone or at one of our offices in London or across the