UK equity release market update

Equity release lenders cut average interest rates in November

Written in line with our editorial policy.

Average lifetime mortgage rates in November fell by one percent compared to the same time last year, potentially saving equity release customers thousands of pounds in interest.

According to Moneyfacts, average lifetime mortgage rates have fallen to 7.13% since the start of the  month, down from 7.33%. In comparison, the average rate stood at 8.13% in the beginning of November 2022.  

It follows the Bank of England’s decision to keep the base rate at 5.25% in November, triggering a drop in interest rates for both the standard and lifetime mortgage markets.

In a further boost to the industry, there are now 312 deals on offer; this compares to the start of 2023 when there were just 179 available. One leading provider now has over 80 deals available for later life homeowners seeking a cash boost in retirement.

In other news, data from the Equity Release Council reveals that customers withdrew £716m of tax-fresh cash from their homes in Q3 2023. That’s up 8% from Q2, making it the busiest quarter of 2023 so far for equity release lending.

Discover how much money you could unlock from your home with our free online equity release calculator.

Flexibility of equity release giving borrowers more options

Later life lending products such as equity release and retirement interest-only mortgages (RIOs), are popular alternatives to conventional mortgages for homeowners who are 55 or over.

There are many different options now available that allow homeowners to tailor their equity release plan to their needs. For instance, a homeowner may unlock the tax-free cash from their home to pay off their interest-only mortgage and top up their day-to-day finances, with no monthly repayments to make as interest is added to the loan. Alternatively, they may be able to arrange an interest-only equity release plan to borrow in later life without the loan ever increasing in size.

An equity release plan typically comes to an end when the homeowner passes away or moves into long-term care, at which point the property is put up for sale to settle the plan. Any money left over from the sale of the home is then given to the homeowners or their estate.

Getting equity release advice

Equity release is typically a lifetime commitment, so it’s very important you make the right decision for you. It’s also important to seek quotes from different providers to ensure you’re getting a competitive deal. 

For your peace of mind, our selected advisers can compare quotes on your behalf and give you all the initial advice and information you need. Better still, this initial advice is given to you free of charge: only if you choose to go ahead with a plan will you receive a fee for advice, which can be paid from the money you release from your home. 

Call our friendly team today on 0808 178 3055 or request a free callback for a time that is convenient for you.

Think carefully before securing other debts against your home.

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn