What happened to equity release rates in 2024?

Explore how rates performed over the last twelve months

Written in line with our editorial policy.

After a turbulent few years for interest rates, 2024 brought some stability to the equity release market. 

This is reassuring news for homeowners considering unlocking property wealth, as stable equity release rates provide greater predictability and confidence when planning your financial future.

Why rates matter to equity release customers

Interest rates are a key consideration for anyone exploring equity release options. Lower rates reduce the overall cost of borrowing, meaning customers can preserve more of their remaining property equity for themselves or their loved ones. 

Rates can also impact how much you can release with a plan, as loan-to-values typically increase when rates are lower.

Average rates fell in 2024

The Equity Release Council (ERC) recently highlighted the recent settling down of average rates in its analysis of the later life lending market. In their report, the ERC noted: “Rates have also stabilised, with average APRs for new lifetime mortgage products reaching a year-low of 6.31% in September 2024 – a marked improvement on the 7%-plus averages seen last year. 

It also pointed out that “despite fluctuating economic conditions, loan-to-value (LTV) ratios for lifetime mortgages at age 70 have edged back towards pre-pandemic levels”. This trend has made it easier for older homeowners to access larger sums of property wealth, which can be particularly beneficial for those looking to clear interest-only mortgages, for example.

Best available equity release rates in 2024

To further illustrate rate trends seen in 2024, we’ve compiled data from our monthly searches for the best available offered by leading UK equity release providers. The best rate is typically considerably below the average available rate, although naturally there is no guarantee that the best rate would be available to everyone.

These best rates are shown in the table below, and demonstrate that there wasn’t a huge amount of variation between them throughout the year, although there was a noticeable increase in the last two months.

Best equity release rates from a search of leading UK equity release providers at AdviseWise at or near the first day of the month, based on a single male taking the maximum available release against property equity of £200,000 with a postcode of PE7 8JG. ‘MER’ is ‘monthly equivalent rate’.

The benefits of drawdown equity release

For those looking to release money now, but who want to take advantage of potentially lower interest rates in the future, drawdown lifetime mortgages may offer an appealing option. 

With this arrangement, you can secure your initial release at today’s rates but retain the opportunity to make future withdrawals if and when rates drop. This approach allows you to time additional releases to take advantage of competitive rates, helping to minimise the accumulation of interest over time.

Find out more about unlocking tax-free cash

If you’re 55+ and wish to explore your options for equity release, do get in touch to discuss your situation with one of our selected advisers. They will check your eligibility, get quotes from leading UK equity release providers, and provide the information and advice you need to make an informed decision. 

Contact us on 0808 178 3055 to talk to one of our selected equity release advisers, or request a call back here.

Source

Average rates for new lifetime mortgage products reached a year-low of 6.31% in September 2024: Unmet later life lending demand evident as equity release market signals recovery. Equity Release Council. Accessed 04 January 2025.

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