The Full Year 2017 report from Key Retirement reveals the highest recorded year both for new property equity release plans and total lending. Drawdown remains the most popular type of plan accounting for 62% of all new plans (Drawdown and Enhanced Drawdown). Drawdown, which retains further accessible funds, also provides potential further borrowing. The average age for those releasing equity in their property in 2017 was 72 years old.
Away from the consistently top reason for releasing equity of Home/Garden Improvement, over 1 in 5 are utilising the funds to repay outstanding mortgages. The average mortgage debt for those releasing equity is £84,000 carrying an average monthly payment of £674. Equity release has become established as a prime option for those looking to clear maturing interest only mortgages.
Whilst many lenders are working hard to lend to older borrowers, reduced incomes in retirement, and tightened mainstream mortgage criteria, still means that many are faced with the only option of selling their home to clear the debt. Increasingly though equity release is providing a robust alternative to meeting this need. 31% of those releasing equity were repaying unsecured debts with the money released. With average credit card balances nearing £11,000 and average monthly payments of £292 to service this debt, the impact of releasing equity to eradicate the burden has a huge impact for many on their retirement income.
Are you retired or approaching retirement and still paying your mortgage?
Our expert advisers are fully qualified to talk you through all your options.
Give us a call today to discuss your needs 01473 213312