All equity release plans sold to new customers from 28 March 2022 must feature penalty-free partial loan repayments, enabling customers to reduce their loan size and save money on interest.
The new standard introduced by the Equity Release Council (ERC) could save customers millions of pounds. While ERC standards aren’t legally binding, almost 700 firms selling equity release products have promised to abide by them.
Other standards include the obligation to either offer fixed interest rates or capped variable rates, the right to remain in the property for life, and a ‘no negative equity guarantee.’
Chairman of the Equity Release Council David Burrowes spoke about the recent changes, “Updating our standards to lock down the ability to make partial repayments on lifetime mortgages – an innovative feature that has become increasingly common in recent years – provides flexibility for consumers and ensures the sector continues to evolve to meet changing demographic needs.”
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.