Lenders cut equity release rates as market conditions improve

In a recent shift within the UK equity release market, lenders have reduced their rates since the start of the month.

Analysis from Moneyfactscompare.co.uk indicates that the average lifetime mortgage rate has fallen to 7.13%, down from 7.33%.

This rate is notably lower compared to the 8.13% recorded in November 2022, the highest since Moneyfacts started electronic records in November 2007.

The market now boasts 312 deals, a significant increase from the 179 available in January 2023. Legal & General Home Finance alone offers over 80 deals.

The Equity Release Council’s data for the third quarter of 2023 shows a marked increase in activity, with £716m released from properties, an 8% rise from the second quarter. A majority of new clients, 53%, have chosen drawdown mortgages over lump sum options.

Rachel Springall, finance expert at Moneyfactscompare.co.uk, emphasizes the potential utility of lifetime mortgages for those looking to supplement retirement income or manage living expenses. “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,” she said. “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.”

She adds that the abundance of deals necessitates careful consideration and advises seeking independent financial advice. “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,” she says. Springall also points out the need to consider the impact of these mortgages on inheritance and associated fees.

Concluding her analysis, Springall remains optimistic about the market’s direction. “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,” she concluded.


Amanda Aumonier, director of mortgage operations at Better.co.uk: “Equity release is a tax-free way for homeowners over the age of 55 to unlock money tied up in their property without the need to relocate. Whether or not your mortgage is fully paid off, you have the flexibility to access funds without making monthly repayments, choosing from options like a lump sum, regular payments, or a combination of both.

“The versatility of released funds allows for various uses, such as helping children onto the property ladder, settling loans, home improvements, supplementing retirement income, or fulfilling dream vacations.