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UK Property Equity Release Mortgage Customers Have Never Been Better Served

Housing-Market / Mortgages Sep 26, 2016 - 12:10 PM GMT

By: MoneyFacts


Competition amongst equity release lenders has clearly intensified in recent years and it is now at a point where perspective equity release customers have never been better served in terms of choice and interest rates, according to the latest research by Moneyfacts.

In fact, there are now a total of 75 different lifetime mortgage equity release deals available, covering a wide spread of options and loan-to-values (LTVs), an increase of 63% on the number of deals available a year ago and more than double the total number three years ago.

A notable trend has been the increase in the number of equity release variable rate deals available, which has more than tripled from 4 to 14 over the last 12 months. This has been driven by the arrival of OneFamily into the equity release market with its range of lifetime mortgages, including variable rates linked to the Consumer Price Index.

Richard Eagling, Editor at Investment Life & Pensions Moneyfacts said:

“It’s clear to see that the equity release sector is responding to the greater demand from elderly homeowners looking to unlock cash from their homes by offering a more diverse range of products and options.

“The growing trend of offering higher LTVs has continued with well over half (57%) of current lifetime mortgage deals offering LTVs at 50% or above (depending on the customer’s age and/or health), compared with just a fifth of deals five years ago.

“A spate of interest rate reductions has made the idea of utilising equity release even more attractive since the Bank of England cut base rate to 0.25%. Since the start of August the average interest rate on a fixed lifetime mortgage has fallen from 6.15% to an all-time low of 5.66%, with some fixed rates falling below 4.00%.

“Key to the diversity that we are seeing in terms of equity release products and lower interest rates has been intensifying competition, with several new providers having already entered the sector, and others preparing to enter, it’s worthwhile for perspective applicants to consider their options.” - The Money Search Engine is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

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