Equity Release Choice At Record High | moneyfacts.co.uk

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MONEYFACTS ARCHIVE. This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Derin Clark

Derin Clark

Online Reporter
Published: 26/04/2021

The number of equity release deals on the market has reached a record high, with over 500 options now available.

Our research found that there are 510 equity release deals available to borrowers today, which is an increase of 444 compared to five years ago, when there were just 66 equity release products to choose from. In addition to a growth in deals, the average rate on equity release has fallen by 2.08% during the five-year period, down from 6.15% in April 2016 to 4.07% today.

 

Equity release market analysis
Lifetime equity release deals April 2016 April 2019 April 2020 March 2021 Today
Number of deals overall 66 187 423 492 510
Average rate overall (fixed and variable) 6.15% 5.09% 4.23% 3.86% 4.07%
Average max LTV 49% 47% 48% 48% 49%

Is equity release right for you?

Equity release can be a good way for older homeowners to unlock some of the equity they have built up in their homes without having to move home by downsizing or worry about making monthly repayments. As well as this, as competition with the equity release market has grown over the last five years, borrowers now have more option when searching for the right deal for their needs, including options that allow them to repay some of the interest or the money borrowed, while drawdown is now a common option on many equity release deals. Saying this, equity release still has a long-term impact on borrowers’ finances, as well as the inheritance they will leave behind, which is why it is important to speak to a financial adviser before going ahead with equity release.

As Rachel Springall, finance expert at Moneyfacts.co.uk, explained: “It is important for any borrower considering equity release to carefully go through the options available to them and seeking independent financial advice would make it much easier to navigate the abundance of deals on the market today. The right choice will depend on personal circumstances and there are many factors with a lifetime mortgage to consider, such as associated fees and any flexibility with drawing wealth out of the home such as with a drawdown option. Hopefully, we will continue to see resilience in the market in the months to come as we ease out of lockdown.”

For more information about equity release, read our guide equity release explained.

How much can you borrow through equity release?

To find out how much you can potentially borrow through equity release, use this equity release calculator.

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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