These higher payments mean homeowners are more likely to turn to equity release in later life – especially if they also have a depleted pension pot. Lifetime mortgages are arguably more appealing than they once were. Last year, the average lifetime mortgage rate was only 1.5% more than an average fixed rate residential mortgage*. This gap was wider in 2013, at nearly 3%.
Despite the predicted increase in popularity, it is important to consider the benefits and potential drawbacks of equity release. While it offers tax-free cash, it will diminish the value of your estate. It seems pre-existing lifetime mortgage holders are aware of this – the average customer borrowed smaller amounts in the first half of this year¹.
Get in touch for advice.
Your home may be repossessed if you do not keep up repayments on your mortgage.
A lifetime mortgage is a long term commitment which could accumulate interest and is secured against your home. Equity release is not right for everyone and may reduce the value of your estate.
*Equity Release Council, 2023
18 January, 2024