From This is Money:
Interest rates on new equity release loans have fallen from about 8% to nearer 6% in the past five years.
But because rates are fixed for life at the start of the loan, existing borrowers have not gained.
Borrowers can, however, switch deals and an estimated 10,000 could save up to £30,000 each in interest payments over the next 15 years, making a big difference to the size of legacy they leave their families.
Customers who have loans with the longest established lenders in the equity release market, such as Northern Rock, Prudential and Mortgage Express, all might gain.
Switching to a cheaper rate is more beneficial the longer a loan is likely to last.
Equity release loans are referred to as mortgages because they are secured against the value of a property.
But unlike in a conventional mortgage, where borrowers make interest payments each month, the interest on an equity release loan is added to the outstanding sum.
The effect of compound interest means a small d…
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