High mortgages may mean more equity released

It’s no secret that higher interest rates have caused mortgage repayments to increase significantly. This year, UK mortgage holders have repaid over £21bn of mortgage debt each quarter – up £4bn when compared to before the pandemic*.

Many favour equity release

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%.

Consider your options

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

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