Half of equity release borrowers in the third quarter used the money released from the value of their homes to pay off outstanding mortgage debt as this usage continues to grow, according to data from Canada Life.

The lender found that the proportion had jumped by 14 percentage points compared to the same period last year, while the proportion who used equity release in order to consolidate unsecured debts fell slightly to 25 per cent.

However, the second most popular reason for using equity release was for home improvement (41 per cent), while holidays were also a popular reason (21 per cent).

Around one in 10 chose to use the funds released to gift to family.

Alice Watson, head of marketing and communications at Canada Life, said that with property values on the rise, it expected to see more borrowers use equity release in order to pay off an existing mortgage.

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She added: “With rising house prices and costs of living, it’s no surprise that some homeowners are wanting to share some of the wealth in their property with family members.

“Using equity release allows people to gift to their family, while still living in their property. In addition, it is also a useful tool for improving the efficiency of estate planning.”