Equity release schemes come in a variety of shapes and sizes. There are schemes that require interest only repayments and some that roll over the interest and add it to the principal amount. Some equity release schemes such as home reversion plans require the home to be sold while others don't.
When it comes to paying off the equity release loan early, early repayment charges apply to most schemes. Penalties for cancelling the equity release scheme are usually quite high, so it is not advisable to cancel the scheme early.
Once you have opted for an equity release scheme, the various terms and conditions make it difficult to opt out. it is therefore advisable to consider your decision very carefully before going ahead with the equity release option.
Consider all your alternatives before opting for an equity release loan. Often, simple measures like downsizing or continuing paid work could be the right answer. For those who want to opt for equity release earlier in life, it is worth looking at fixed term five or ten year plans.
Equity release schemes affect not just the borrower but also their family. It is an important decision that has long term consequences for the family and such be treated as such!
