It’s a question that’s been on your mind for some time: can you pay off equity release early? The short answer is yes, you can. But it may not make financial sense to do. Let’s take a closer look at the implications.
Can you pay off equity release early?
It all depends on your equity release lender. Some lenders give you the option to repay what you owe early, without incurring additional charges. (A good independent financial adviser will be able to help you find them.) However, it’s far more typical in the industry for equity release lenders to charge for repaying funds early. That can be expensive.
Beware: early repayment charges
Leaving your equity release agreement early can incur high fees. As we said, the specifics depend on your lender. But typically you will be charged two fees: the interest on your borrowing as well an early repayment fee. The latter charge alone could amount to several thousands of pounds. So while lumping off debt always feels good, and is to be encouraged, it may not make the most sound financial sense to pay off equity release ahead of schedule.
Talk to an adviser…
Before making any big financial decision, it really is best to speak to an independent financial expert. In the case of equity release, a financial adviser will be able to help you to find the best product for your circumstances and financial ambitions. Alternatively, if you already have an equity release plan and want to repay the funds early, a financial adviser will be able to talk through the implications with you and look at what’s best for your financial landscape.
Ready to get the conversation started? Get in touch and talk to an expert. We are here for you. This article was written by Adam Prestwood.