The latest market report from the Equity Release Council found that more than 90,000 equity release customers opted to make a total of 190,374 voluntary penalty-free partial repayments over the year. That’s an increase of 48% on the level of voluntary repayments made in 2021, and was worth a total of £102m.

The council suggested that these repayments would mean that borrowers saved £116m in future interest costs over the next 20 years.

The Equity Release Council made it compulsory for providers to allow voluntary part repayments, without charging a penalty, in March last year.

David Burrowes, chair of the Equity Release Council, said: “By making modest repayments when they can afford to, customers can benefit from their property wealth in the here-and-now, while reducing their overall borrowing costs by tens of thousands of pounds.”

Record activity levels

The report also revealed that equity release activity hit new record levels in the second half of 2022, though there was a slowdown in the final quarter following the impact of the mini Budget.

It noted that product pricing has dropped steadily over the last five months with average rates now at 6.23%.

Product numbers have increased to almost 200, though the council noted that maximum loan to values have tightened from an average of 47% in August to 38.7% today.

Burrowes noted that with many pensioners struggling to afford a moderate standard of living, equity release can make a huge difference.

He added: “The option of turning property wealth into pounds in their pocket has never been more important for consumers and our ageing society. As the market recovers from the economic shocks of late 2022, it is vital that people consider the role of their homes in covering the costs of later life.”