New data from Canada Life reveals that 49% of customers using equity release did so to clear an existing mortgage in 2022.
This marks the fifth consecutive year where repaying existing mortgages has been the top motivation for equity release.
Additionally, nearly a third (32%) of homeowners used equity release to make home improvements, while one-fifth (20%) turned to equity release to fund their day-to-day living costs as the cost-of-living crisis continues to impact households.
Meanwhile, 16% of customers used equity release to consolidate unsecured debt.
Despite the challenging economic climate, customers also utilized equity release to support discretionary spending. In 2022, 15% of customers released equity to pay for holidays, 12% to buy new properties, and 10% to purchase new cars.
Alice Watson, head of marketing communications at Canada Life UK, said: “Customers continue to use equity release in a wide variety of ways, from home improvements to consolidation to paying off existing mortgage borrowing. As the ongoing cost-of-living crisis unfolds, many customers are taking stock of their finances, including the wealth tied up in their homes.”
Watson emphasised the flexibility and accessibility of equity release options, allowing homeowners to enjoy their retirements in ways that suit them and their families.
However, she also stressed the importance of seeking the help of a financial adviser and discussing the decision with loved ones, as equity release is a lifelong financial decision.
The top five reasons for loans in 2022 include clearing existing mortgages (49%), making home improvements (32%), funding day-to-day living (20%), consolidating unsecured debt (16%), and paying for holidays (15%).
