Norwich Union's equity release product - which gives people aged 60-plus access to some of the cash tied up in their home - is now available to Leeds and Holbeck Building Society customers following a link-up between the two companies.
Equity release is becoming increasingly popular as a way of boosting retirement income to fund everything from dream holidays and new cars to long term care and investment. New figures from SHIP (Safe Home Income Plans), which represents the major equity release providers, show that the total equity release market was 33 per cent higher in January to June 2002 compared with the same period last year. Older homeowners released more than £313million in cash from their homes in the first six months of this year.
The Flexible Cash Release Plan is a mortgage-style product - the most popular type, accounting for 75 per cent of equity release plans taken out in 2001. No repayments are made during the customer's lifetime and there is a no-negative equity guarantee. The interest rate is fixed.
The proportion of the property value which can be released as a cash lump sum increases with the homeowner's age, starting at 17 per cent for age 60 and rising to 50 per cent for age 89-plus.
