Those unfamiliar with equity release will have many questions to ask before they even consider using the equity from their home to free up some cash. How does it work? How will I pay back the loan? And what would I even use it for?
While most of those questions are answered in our guide, new research has just revealed the most popular reasons people are taking out equity release loans, so read on for some ideas.
Data from Retirement Advantage has revealed that between July and September, one in four people (25%) took out equity release to help pay for renovations. This makes it the number one reason people release equity from their home, with the funds for these renovations able to be used for things such as adding a conservatory or extra room, taking care of some necessary property upkeep, or preparing one's home for the possibility of decreased mobility in later life.
The second most popular reason for taking out equity release was to settle a mortgage, which 21% of stated as their reason, putting paid to the idea that equity release loans are only for those who are completely mortgage-free.
After that, 13% of Retirement Advantage's customers released equity to help pay off debts, while 12% used it for the much more fun activity of going on holiday, and an equal amount simply used the released funds to cover everyday living expenses.
Clearly, there are many different reasons why people are taking out equity release, and as it becomes more well-known and trusted, more reasons will no doubt come up. "There is a groundswell of customers recognising that their property can play just as much a role in their retirement planning as pension income and other assets," said Alice Watson, head of Marketing at Retirement Advantage Equity Release.
"Given that for many their property wealth is worth more than their pension savings, and can be released without losing the ability to pass on its value as inheritance, this kind of holistic thinking is positive and can help ease reliance on pension pots for retirement income."
If you're inspired by any of these reasons, and curious to know more, why not have a look at our Frequently Asked Questions? Then, if you're ready to take the next step, you could go to our equity release page and get in touch with our preferred broker to get a better idea of what your specific options are.
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 Any products featured may be withdrawn by their provider or changed at any time.