Equity Release Interest Rates Rise

The Rise of Equity Release Interest Rates

Does an Increase in Equity Release Interest Rates Change the Game? Is Equity Release Still a Good Idea? We’ve Got the Answers to These Burning Questions Right Here...

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Equity Release Interest Rates Rise As Homeowners Clamour for Affordable Products

As we emerge from a global pandemic and feel the effects of an unstable economy, equity release interest rates rise in line with current market inflation. 

What does this mean for the future of equity release and how expensive will these products be?

Is there hope for rates drops in the near future?

Here’s our report.

What Are the Current Equity Release Interest Rates?

The current equity release interest rates start at 3.1% and rise to 6.8%. This is vastly more than the minimal 2.3% and average of 3.67% that we saw in March 2021. 

When Will Interest Rates Drop?

Equity release interest rates are only expected to drop in 2024, so now’s the best time to unlock the value of your property through one of the many available retirement mortgage products. 

However, your age and financial plan may impact when it’s best to unlock equity, so always consult your financial advisor before making any concrete decisions. 

Why Are Equity Release Products Still So Popular in 2022, Despite Rates Increases?

Equity release products are still so popular in 2022 because they offer retirees a flexible opportunity to unlock their property wealth. 

While interest rates were once competitive compared to regular mortgages, it’s unlikely that we’ll see further drops for a while.

However, new laws mean that equity release is even more flexible. 

Why Consider Equity Release in 2022

There are 2 reasons to consider equity release in 2022:

  • As of 31 March 2022, equity release lenders must offer the option of voluntary and loan repayments on all new plans. Pressure-free payments mean that you’ll drastically reduce the cost of your loan. 
  • Equity release plans are more flexible than ever, saving you money. You can opt for a drawdown plan or find an option with free advice, a free valuation1 and no completion fees, saving you thousands. 

Final Thoughts

In their recent spring report2, the Equity Release Council mentioned that the industry is 6 times larger than it was in 2011,

and as housing prices increase along with the cost of living, more homeowners turn to their property wealth to access a stress-free retirement. 

Despite a rise in equity release interest rates, there’s no stopping the growth of these convenient products.

Could you be next?

Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

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