The way that customers are using equity release is changing
We’re seeing more diversity in the reasons why customers are taking our lifetime mortgages, which confirms that equity release is continuing to be viewed as a sensible option in a holistic approach to retirement planning.
In Q3, some of the headline reasons for loan were:
1 in 2 customers are clearing a mortgage
That’s a 6% increase year on year. The interest only timebomb is a topic well covered by the press, and a surge of interest only mortgages are due to mature after 2020. The FCA has advised borrowers not to stick their head in the sand about their repayment vehicle, and interest paying lifetime mortgages are becoming a sensible solution for many.
16% of customers are using the money to cover daily living expenses
A 10% increase year on year. A decline in the number of occupational pension schemes, coupled with inadequate pension savings and increased life expectancy mean that for many, their retirement income is not sufficient.
More than 3 in 10 customers are clearing unsecured debts
The latest research from Mintel shows that 4 out of 10 over-45s have outstanding debt, with 15% owing money on credit cards and store cards.
13% of customers are using equity release to purchase a new property