Findings from the industry body showed annualised interest rates for the top 10 equity release providers, amounted to 6.14 per cent. In contrast, the average SVR for the top 10 mainstream mortgage lenders currently stands at 6.49 per cent.
The research showed that National Counties and GE Life came top of the equity release provider table, with an annualised rate of 5.95 per cent. The highest was Mortgage Express with 6.37 per cent. In comparison, the lowest rate offered by mainstream mortgage lenders came from Barclays, at 5.70 per cent, while the highest was Royal Bank of Scotland’s (RBS) offering at 6.89 per cent.
Commenting, Jon King, chief executive of SHIP, said given the long-term nature of the funding for equity release, the rates offered were more competitive as they were fixed for the term of the mortgage, regardless of any changes to the Bank of England Base Rate (BBR).
He said: “The fact that the average interest rate from the top 10 equity release providers is lower than the average mortgage from the top 10 mainstream lenders delivers a solid rebuff to critics who claim this type of lending is prohibitively expensive and an option of last resort. It is clear that equity release compares favourably with many mainstream mortgage products and for many people, offers a viable solution to their financial needs.”
Commenting, Ged Hosty, director at In Retirement Services, said: “Equity release offers excellent value to customers, but it isn’t just about headline rates. Product features such as the ‘no negative equity guarantee’ and the flexibility in the products means they present a preferable option to many borrowers.”
