Cost of Living Drives Interest in Mortgage Equity Release

In recent years, mortgage equity release has become an increasingly popular way for older homeowners to unlock cash tied up in their properties.

Mortgage equity release products enable homeowners over the age of 55 to access equity locked up in their homes while still being able to live in their property. New research suggests that many homeowners are now choosing to do so to help them with the rising cost of living.

According to analysis¹, 14% of mortgage equity release applications in Q1 2022 were made by customers looking to bolster their everyday living costs. A further 12% were looking to unlock cash in order to consolidate unsecured debts. Meanwhile, over a third (36%) wanted to use equity release to clear their outstanding mortgage.

Mortgage equity release use hits record highs

Q2 2022 saw mortgage equity release lending figures hit record highs, reaching £1.6bn – a 26% increase year-on-year. This marks the fourth consecutive quarter of near record figures, according to the Equity Release Council (ERC)² and equates to nearly 12,500 new plans being taken out by over-55s between April and June 2022 alone.

ERC Chair, David Burrows, commented, “Raising awareness of how modern mortgage equity release products work, alongside other financial solutions, is essential so people who are asset-rich, but cash-poor, can benefit from the wealth they have built up over their lifetimes and also support those around them.”

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Mortgage equity release isn’t right for everyone. It can prove an expensive option, can be inflexible and may impact entitlement to benefits. It is vital to take financial advice to ensure it is a suitable option for your individual circumstances.

To find out more about your options, please do get in touch. You are welcome to request a free initial review to discuss mortgage equity release. We are often visiting clients throughout the South East area, including Eastbourne, Brighton, Tunbridge Wells, Hastings, Bexhill, Lewes, Uckfield, Heathfield, Newhaven and surrounding areas.

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¹ Canada Life, 2022
² Equity Release Council, 2022

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. Think carefully before securing other debts against your home. Equity released from your home will be secured against it.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

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The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Taxation depends on individual circumstances as well as tax law and HMRC practice which can change.

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