The equity release remortgage is becoming more popular with senior citizens. With the pension plan up in the air and possibly changing tomorrow, an alternative to standard retirement is exactly what seniors need. The equity release remortgage is a product which allows people 60 years of age and older, to release cash from their home as a repayable loan which is taken care of on the sale of their home, after they pass away.

The money released through this product is free and clear to be used by the homeowners any way they see fit. Whether they need a holiday, want to pay for a grandchild’s college, or use it for home improvements, the funds have multiple uses.

However, with the good, comes the bad. New figures just released by Defaqto make the equity release sound a little iffy. The figures show that a popular type of equity release plan, the lifetime mortgage, is now very expensive. There exists a gap now between interest rates on these products and their closest relative, the long term fixed rate residential mortgage. This has more than doubled over the past two years.

The cost is now lower to acquire a long term residential mortgage than it is to purchase a lifetime mortgage for a 10-year period.

There are limits, however, to the withdrawal amount. These limits are typically based on age and gender. These products also carry a no negative equity guarantee, meaning they can never owe more than the value of their property.

Experts also make a solid argument for alternatives to the equity release plan.

Some alternatives which experts have mentioned, include but are not limited to, selling the property in exchange for a cheaper on, possibly borrowing from relatives or taking out a loan.