Equity release: One lump or two?
The number of homeowners opting for a lump sum when releasing equity from their property has increased from 37 per cent to 41 per cent for the first half of the year.
Whilst drawdown plans remain the most popular amongst homeowners, the increase in lump sum loans suggests a rising number of borrowers have an urgent need for funds rather than an ongoing one. This could be to pay off debts such as interest-only mortgages or to even help children or grandchildren buy their own home.
Richard Espley, Head of Equity Release, comments:
“For many people set to retire their financial landscape looks a little bleak, particularly those set to enter retirement in debt.
“The crash has meant savings have not flourished as we would have hoped whilst the increasing cost of living has placed extra pressure on incomes, not only preventing people from paying into their pension but also forcing many to rack up credit card debt.
“However it would seem many are now realising the opportunities equity release offers. By turning to their largest asset, homeowners are able to clear debts, help loved ones and enjoy a far more comfortable retirement.”
Content correct at time of publication