Nearly four out of 10 (38%) of Stonehaven’s customers applied for a lifetime mortgage for that very reason, while a further three in 10 (28%) planned to clear unsecured debt.
Alice Watson, product and communications manager, Stonehaven, said: “The lifetime mortgage market has evolved considerably, reflecting the changing needs and aspirations of retirees.
“An increasing number of our customers are applying for lifetime mortgages to clear their existing mortgage as it offers a sensible solution to the interest-only time bomb for those who do not have a repayment vehicle in place.
“Thanks to increased property prices, older homeowners with substantial equity in their home can look to lifetime mortgages to unlock some of the capital.
“With rumours of interest rate hikes on the horizon, older homeowners who are approaching retirement are looking for a financial product which offers them life-long stability with no surprises further down the line.”
Other reasons to take out equity release included making home improvements (30%), funding a new property (20%) and providing gifts to children and grandchildren (19%).
Watson added: “The Chancellor’s pension changes brought in during the 2014 Budget means equity release now has a much bigger role to play and for many retirees it will be the sensible solution to avoid financial hardship.”
