Equity release rates rise as deals are pulled from market
Lifetime mortgage rates have increased from record lows as the sector is hit by the impact of the coronavirus pandemic, analysis has revealed.
More than two-thirds of equity release lenders raised rates on select deals in April while the number of products available also dropped, according to Moneyfacts data.
The average equity release rate now stands at 4.34 per cent, from 4.20 per cent in March – the lowest it had reached since Moneyfacts’ records began in 2007.
The choice of deals has fallen from 423 in April to 357 in May.
Moneyfacts said this was in large part down to one provider condensing options by 60.
Rachel Springall from Moneyfacts said: “At first glance, a drop in the number of equity release deals month-on-month may seem concerning, but it is worth pointing out that most lenders in the lifetime mortgage market are still offering an abundance of choice.
“If more lenders consolidate their ranges though, then this could be more of a sign of restructuring their options to a target market. One area for consumers and advisers to monitor is the maximum loan-to-value bands, as these could tighten, however month-on-month there has thankfully been little change.”