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Equity release rates cut as lenders improve offers

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
27/11/2023

Equity release rates cut as lenders improve offers

The equity release market has seen lenders cut rates since the start of this month, according to the latest analysis from Moneyfactscompare.co.uk.

Equity release rates cut as lenders improve offers

The equity release market has seen lenders cut rates since the start of this month, according to the latest analysis from Moneyfactscompare.co.uk.

  • Lifetime mortgage rates are falling, with the average rate reaching 7.13% since the start of this month, down from 7.33%. At the start of November 2022, the average rate stood at 8.13%, its highest on Moneyfacts’ records (electronic records began in November 2007). The choice of deals stands at 312, a far greater number than at the start of this year (January 2023 - 179).
  • Several lenders have cut rates in their ranges since the start of November 2023. In terms of options, Legal & General Home Finance has over 80 deals available in its range.
  • Figures from the Equity Release Council for Q3 2023 saw customers unlock £716 million of property wealth in total, the busiest quarter of 2023 so far for lending. This was up 8% from £663 million in Q2 2023.
  • A majority of new customers have chosen drawdown (53%) over a lump sum option, according to the Equity Release Council.

 

  • Lifetime mortgage rates are falling, with the average rate reaching 7.13% since the start of this month, down from 7.33%. At the start of November 2022, the average rate stood at 8.13%, its highest on Moneyfacts’ records (electronic records began in November 2007). The choice of deals stands at 312, a far greater number than at the start of this year (January 2023 - 179).
  • Several lenders have cut rates in their ranges since the start of November 2023. In terms of options, Legal & General Home Finance has over 80 deals available in its range.
  • Figures from the Equity Release Council for Q3 2023 saw customers unlock £716 million of property wealth in total, the busiest quarter of 2023 so far for lending. This was up 8% from £663 million in Q2 2023.
  • A majority of new customers have chosen drawdown (53%) over a lump sum option, according to the Equity Release Council.

 

Equity release market analysis

Lifetime equity release deals

Nov-18

Nov-21

Nov-22

Jan-23

Oct-23

Nov-23

Today

Number of deals overall

126

811

310

179

293

287

312

Average rate overall (fixed and variable)

5.10%

4.38%

8.13%

6.74%

7.09%

7.33%

7.13%

Source: Moneyfactscompare.co.uk

 

Equity release market analysis

Lifetime equity release deals

Nov-18

Nov-21

Nov-22

Jan-23

Oct-23

Nov-23

Today

Number of deals overall

126

811

310

179

293

287

312

Average rate overall (fixed and variable)

5.10%

4.38%

8.13%

6.74%

7.09%

7.33%

7.13%

Source: Moneyfactscompare.co.uk

 

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“A lifetime mortgage could be an option for borrowers to use some wealth from their home to support their retirement plans or help towards the cost of living. Those weighing up their options may be pleased to find that lenders have been making rate reductions this month, and that the choice of deals is resilient. The choice of lifetime mortgages has been relatively stable over recent months, but there has been encouraging growth compared to the start of this year.

“According to a recent report from the Equity Release Council, Q3 2023 was the busiest quarter so far this year for lending. The report also revealed that 53% of new customers opted for drawdown lifetime mortgages during the same quarter. As interest rates have been volatile year-on-year, it’s not too surprising to see a slight preference for this option versus taking a lump sum, particularly as the average equity release rate stood at a record high of 8.13% in November 2022. A drawdown option may be more enticing for homeowners who only need to release a small portion of wealth when they need, which will mitigate incurred interest.

“Borrowers who are considering an equity release plan would be wise to seek independent financial advice to navigate the abundance of deals and choose the right one that suits their circumstances. Lifetime mortgages have several important factors to consider, such as associated fees, drawdown and, of course, the impact on passing inheritance to family members. Hopefully, we will see continued resilience in the market and more rate cuts as the year-end approaches for those looking to take out a lifetime mortgage.”

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“A lifetime mortgage could be an option for borrowers to use some wealth from their home to support their retirement plans or help towards the cost of living. Those weighing up their options may be pleased to find that lenders have been making rate reductions this month, and that the choice of deals is resilient. The choice of lifetime mortgages has been relatively stable over recent months, but there has been encouraging growth compared to the start of this year.

“According to a recent report from the Equity Release Council, Q3 2023 was the busiest quarter so far this year for lending. The report also revealed that 53% of new customers opted for drawdown lifetime mortgages during the same quarter. As interest rates have been volatile year-on-year, it’s not too surprising to see a slight preference for this option versus taking a lump sum, particularly as the average equity release rate stood at a record high of 8.13% in November 2022. A drawdown option may be more enticing for homeowners who only need to release a small portion of wealth when they need, which will mitigate incurred interest.

“Borrowers who are considering an equity release plan would be wise to seek independent financial advice to navigate the abundance of deals and choose the right one that suits their circumstances. Lifetime mortgages have several important factors to consider, such as associated fees, drawdown and, of course, the impact on passing inheritance to family members. Hopefully, we will see continued resilience in the market and more rate cuts as the year-end approaches for those looking to take out a lifetime mortgage.”

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

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James Hyde Press & PR Manager
Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Apprentice Press & PR Assistant