Equity Release mortgages fall

Key Retirement Solutions has today announced the latest figures from its index of activity in the Equity Release market. Equity release mortgages are also known as lifetime mortgages and allow those over a certain age to borrow against the value of their property, either in a lump sum, or bit by bit each month. No repayments are made, and interest is rolled up and added to the loan, to be repaid when the house is sold.

According to KRS, the total number of plans taken out by those over the age of 55 who qualified, has fallen some 16 per cent to 18,910 in the twelve months to date. However, the average amount taken out per plan has increased by just over 4% to £52,298, when compared with the same period last year, with Scotland establishing itself as the biggest growth region with a 34% increase in the number of plans taken out.

Dean Mirfin, business development director at KRS, said the figures shed a positive light on the equity release sector as a whole. He explained: “The third quarter of this year has shown that demand for equity release is still high. It is important to note that new business levels have increased quarter on quarter throughout 2008.

He continued: “The market is proving that there is a strong demand for equity release and that there are plenty of lenders who are able to lend, and at competitive rates. At the time of publication the lowest fixed rate for life available is 5.92% monthly, which equates to 6.08 annualised.”

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