You are here: Home -

Equity release rates hit six-year high

Written by: Shekina Tuahene
Average lifetime mortgage interest rates have breached 5% for the first time since 2019, putting equity release pricing at its highest for six years.

Average rates in July were recorded at 5.63%, up from 4.96% in June, according to data from Moneyfacts.

And it comes as the number of lifetime mortgage products on the market dip to 631 from the 667 available last month.  

The current average rate is just below the 5.76 per cent peak seen in August 2016 when there were 88 lifetime mortgage options. July’s rate is also up on April 2019’s average of 5.09%, the last time equity release rates exceeded 5% and there were 187 products on the market. 

Compared to last year, average lifetime mortgages rates are up on 4.35% while product availability is down on the 657 deals on the market at the time. 

The later life mortgage market has seen significant growth recently, with borrowers releasing £1.53bn of property wealth in Q1 2022, according to the Equity Release Council. This marked the busiest quarter on record for the sector. 

Rachel Springall, finance expert at Moneyfacts, said: “Retirement plans could be hindered by the rising cost of living and consumers may be considering ways to plug the gap, such as by releasing wealth tied up in their home. Interest rate rises were widespread within the lifetime mortgages sector throughout June 2022.  

“Choice of lifetime mortgage options has remained relatively stable since the start of the year, with around 630 deals to choose from today, but the abundance of options on offer far outweighs what was available in 2020.” 

She added: “In the midst of rising interest rates, consumers may feel pressured to take out a lifetime mortgage, but it is imperative they seek independent financial advice to ensure it’s the right choice for both them and their relatives. Homeowners may find they can avoid pulling wealth out of their property altogether, but if it is the most appropriate choice then they must be conscious of how equity release works and its resulting impact.” 

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.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

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

Privacy Preference Center