How Equity Release products are looking more and more like standard mortgages
Without doubt, the ability to access equity built up in the home provides a financial lifeline to homeowners trapped in an unaffordable mortgage contract, meaning they can pay this off and free themselves from monthly repayments. It also provides a means of helping those needing to increase their retirement income or find a way to pay for home improvements.
Indeed, this innovation has meant that lifetime mortgages now resemble standard mortgages in more ways than ever, for example:
The option to make regular repayments
The option to repay the loan entirely after an initial period
The option to move home
Some features of some equity release plans are actually potentially more beneficial than those available under a standard mortgage, such as:
An interest rate that is fixed for life
No negative equity guarantees
Equity release will never be suitable for everyone but the increased flexibility of these products certainly increases their appeal to many.
It’s therefore not surprising that demand for equity release products increased 25% from 2017 to 2018 and that lifetime mortgages now represent a third of all mortgages taken out by homeowners aged over 55.
The lifetime mortgage market has responded accordingly with the number of products available doubling between 2018 and 2019. Product innovation has also moved rapidly with the number of options available to consumers increasing to 221 in the past year.