Updating research findings from September 2006, SHIP confirmed that the average rate for equity release continued to be considerably lower than the average standard variable rate (SVR) for mainstream mortgages.
The average rate of interest for the top ten equity release providers is currently 6.39%. However, the average SVR rate for the top ten mainstream mortgage lenders is now 7.32%. There is now 0.93% difference between the two rates, compared to only 0.35% difference in September 2006 (average equity release rate Sep 06 – 6.14%, average SVR rate Sep 06 – 6.49%).
The rates offered by SHIP lifetime mortgage providers are fixed for life and also factor in a no negative equity guarantee. These updated figures confirm the competitive position of lifetime mortgages against the mortgage market as a whole.
Jon King, chief executive of SHIP, commented: “This further research by SHIP continues to counter critics’ claims that equity release lending is prohibitively expensive and an option of last resort. Since April this year the whole of the equity release market has become fully regulated by the FSA. SHIP has also continued to campaign to raise the standards of advice available to consumers through calling for compulsory examinations for IFAs offering SHIP members’ products and issuing advice checklists adhering to a stringent code of conduct. With these rising standards and the low interest rates highlighted above, it has literally never been safer or cheaper to take out equity release and in many cases it can offer a very viable solution to older peoples’ financial needs.”
