You are here: Home - Mortgages - Remortgage - News -

Homeowners turn to equity release to pay down debt

0
Written by:
23/05/2019
Around one-third of those who release equity from their homes do so to pay off credit cards and loans, according to new research from equity release group Key.

While 35 per cent are paying off unsecured debts, a further 28 per cent of retired homeowners used property wealth to clear outstanding mortgages. This is up from 21 per cent in 2018 and the third highest level since Key started its Market Monitor in 2007.

More people are withdrawing money from their homes, with new lending rising to £839.58 million. This takes the value of the market in the first quarter of 2019 to £1.18 billion up from £1.03 billion in the first quarter of 2018. 

Northern Ireland, the West Midlands and Yorkshire & The Humber recorded the biggest increases in borrowing. 

Those using equity release took an average of £75,032 during the three months. Although over half are using the money to pay down of some kind, the most popular use of the money remains paying for home and garden improvements. Holidays and helping family are also popular options. 

Will Hale, CEO at Key, said: “Typically the equity release market has a quieter start to the year but the latest Q1 results suggest that we should see continued growth in 2019.  The current challenging economic environment has seen a move away from holidays and home improvements to people tackling pressing immediate issues such as to pay off debt.

“Nearing or entering retirement with an income that might be exceeded or matched by debt repayments can be hugely stressful and may mean people need to make fundamental changes to their plans such as working longer.  However, this will not solve everyone’s issues and is not even viable for some so looking into downsizing, equity release or other later life lending options might be the right answer.” 

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

Low-income pensioner? You could gain £3k top-up

Hundreds of thousands of retirees struggling with a low income are missing out on Pension Credit worth £3,300...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week