Average lifetime mortgage rate dips below 5% for first time
The average lifetime mortgage rate has dropped below 5% for the first time on record, according to Moneyfacts.
The financial information provider also said the number of equity release deals has risen, giving more choice to potential later life borrowers.
The average equity release rate for fixed and variable rate mortgages now stands at 4.99%, down from 5.10% a year ago and 6.11% five years ago. There are now 207 lifetime equity release deals, up from 164 a year ago and just 48 five years ago.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “While rate alone should not be the deciding factor when choosing a lifetime mortgage, it is still a positive indicator that competition is rife in the market. The whole package of an equity release deal must be weighed up, especially any fees included. As 66% of the market charges a product fee, borrowers need to be wary of the upfront cost of any deal.
“The reasons why borrowers choose an equity release deal can vary. Whether it be to fund any gap for later life care costs, to reduce the blow of an Inheritance Tax bill, or just to make retirement more comfortable, it is vital consumers get independent financial advice to ensure it is right for them.”