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Equity release

ended 01. March 2022

A journalist at Thisismoney / Mail Online is looking for a couple of quick comments today about equity release, as Moneyfacts has released some data showing that rates have risen to 4.33%, up from 3.86% less than a year ago (see screengrab below). Apparently, this is in line with wider market trends, but it seems to be surpassing pre-pandemic levels (March 2020 was 4.20%). She is keen to know how higher rates will impact current and future ER borrowers and what they need to look out for. Deadline is COB but the early bird and all that….

 

4 responses from the Newspage community

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Rob Peters
Principal at Simple Fast Mortgage
The era of super low interest rates has come to an end for equity release borrowers (and everyone else!). Interest rate prediction is always difficult as things change as time passes, but considering economic factors the end of the 2022 could see average equity release rates around 6%. Anyone who has taken equity release over recent years has locked in a great lifetime interest rate. If equity release is something you are considering it could be worthwhile taking action now, before rates rise further.
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Robert leatherland
Director at Bespoke Wealth
Equity Release rates are rising and we have seen an increase of 200% in clients taking Equity Release in the first part of 2022. Clients are certainly taking advantage of rates whilst they are still relatively low. Borrowers could consider taking what they need now on a fixed interest rate and having access to further funds in the future on a drawdown facility. This will ensure interest is only paid on the money they need and spend. Rather than paying interest on having money sat in the bank. Now can still be seen as a good time for borrowers because property prices are high meaning borrowers can still raise good amounts from their properties to fund their retirements, holidays and luxury purchases, pass on to their children/grandchildren, assist family members on the property ladder or as part of estate planning. We have also undertaken a number of Equity Release re mortgages and in some cases managed to halve the interest payable for borrowers that took out Equity Release previosuly as rates are still currently lower than in previous years.
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Rob Gill
Managing Director at Altura Mortgage Finance
The rise in Equity Release interest rates is arguably far less dramatic than 'normal' mortgage interest rates which have seen significant rises, across fixed rates in particular, since the Bank of England base rate hike in December last year. The absolutely key to Equity Release mortgages, regardless of interest rate. is sound advice from a qualified, experienced adviser, and a process that takes sufficient care to make sure it's the right solution for each client and their family.
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Stuart Powell
Managing Director at Advice Guru
Anyone who is interested in exploring their Equity Release options needs to act now. With most lenders increasing their rates on a near weekly basis for the last six months, the trend is clear. Interest rates are still at temptingly low figures however we find that many people consider Equity Release for over a year. If they wait too long, the rate invariably increases. We also implore the 300,000 who have taken Equity Release in the last 30 years to obtain a free review as these homeowners are often on interest rates over 6% when rates around 3% could be available to them.