The average rate of a lifetime mortgage has reached a record low, whilst the number of available options is at an all-time high.
The typical rate across lifetime mortgages has dropped below 4 per cent for the first time according to Moneyfacts, with the average rate now at 3.95 per cent - down from 4.49 per cent this time last year.
Meanwhile, those currently comparing deals will find that the number of products available has expanded to an all-time high of 488, up from 405 in February 2020.
The average rate across all lifetime mortgages is 3.95 per cent according to Moneyfacts The equity release market has started this year awash with rate cuts, said Rachel Springall, finance expert at Moneyfacts.
Holding the attention of anybody, particularly at breakfast time, is even trickier in this day and age.
Which makes me think of the constant array of sessions available to later life advisers today and, even when we’re all currently stuck indoors for most of the day, there are only enough hours and only enough sessions worth putting the Zoom or Teams on for.
It’s a conundrum, especially when you want to touch base with all stakeholders as often as possible in order to make sure, firstly, that everyone is doing well and coping, but that we’re also able to provide the support and resource that is so important, particularly in the later life sector.
Average equity release rate hits new low
By Gary Adams 1
st February 2021 11:33 am
The average rate across lifetime mortgages – for both fixed and variable varieties – has dipped below 4 per cent “for the first time on our records,” says Moneyfacts.
At 3.95 per cent this is a marked difference from the average of 4.49 per cent seen in February 2020 and 5.20 per cent recorded in February 2019.
Alongside this fall in rates is an inverse direction in product numbers – today, according to the data, there are 488 lifetime mortgages on the market as compared to 405 in February 2020 and 204 in February 2019.
This shows that lenders are moving to meet a surge in demand, says Moneyfacts, with the pandemic “clearly” having had an effect.
The latest analysis from Moneyfacts has revealed that the equity release market has been buoyant at the start of 2021, as lenders have pushed the average rate of a lifetime mortgage to a new low of 3.95%.
The volume of options available to consumers has reached a new high according to Moneyfacts data, with 488 options on the market.
Key has suggested that wealth unlocked from the home to support family members is a driver in sales, and more homeowners aged 55 and over are worried about a retirement shortfall according to the Equity Release Council.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “The equity release market has started this year awash with rate cuts and prospective borrowers looking to release wealth out of their home will find that the interest charged, on average, has now fallen to a record low.
Older homeowners were more cautious about taking cash out from their properties in 2020, as drawdowns from lifetime mortgages dropped by more than a fifth.
There were 21 per cent fewer borrowers who made drawdowns from existing equity release pots last year, deciding instead to leave the money in the hands of their lender, according to the Equity Release Council.
The number of customers seeking further advances - additional borrowing on top of their existing lifetime mortgage – also dropped 11 per cent.
Some over-55s use equity release mortgages to give them cash to enjoy their retirement
Equity release products are available to homeowners aged over 55 and allow them to access cash based upon the value of their home.