Falling equity release rates good news for new and existing customers
Average lifetime mortgage rates have fallen from 7.23 per cent to 6.64 per cent over the past five years, according to latest research by Moneyfacts.co.uk.
The significant drop in rates is largely down to the steady increase in the number of equity release plans sold. The research also suggested 31 per cent of retirees used equity release during the first half of the year, up 8 per cent from the same period last year.
The drop in rate is good news for both retirees considering equity release and those with an existing plan as Richard Eagling, pension expert at Moneyfacts.co.uk, comments:
“The fact that interest rates on equity release lifetime mortgages have been steadily falling is great news not only for homeowners considering equity release for the first time, but also for those who may now be able to switch their existing product with a lower interest rate.
“The last few years have seen much greater awareness amongst consumers of the potential of equity release to supplement monthly incomes that have been squeezed by high inflation, falling annuity rates and disappointing pension fund returns.
“Anyone who has taken out an equity release product in the last five years may want to seek professional financial advice as to whether a switch is a realistic option, especially as early repayment charges or new arrangement fees will need to be considered.”
Content correct at time of publication