Flexible financial solutions
The report highlights one of the key attractions of equity release: the ability to access funds when needed in the future, rather than having to access all of the available money in one lump sum. This is done via a drawdown facility, which means that you only incur interest on the money you access from a ring fenced fund. By taking what you need over several years rather than a single lump sum, you can minimise how much interest builds up on your plan.
Drawdown lifetime mortgages are gaining in popularity. The latest data from the Equity Release Council reveals that drawdown is holding its position as the preference among new customers, with 56% opting for it in Q2 2024.
There was also a 4% quarter-to-quarter increase in the number of returning drawdown customers. These are people who have previously set up a drawdown facility, and have now used it to unlock further funds from their home’s value. Over 8,000 customers chose to do this between April and June.
David Burrows, Chair of the Equity Release Council said:
“Almost 20 years on from their introduction, it’s notable that drawdown products are becoming the majority preference once again. Some of the new flexibilities embedded into the modern market such as fixed early repayment charges are equally designed for the long-term and set up so that customers can benefit from years to come.”
