Rates are rising on equity release mortgages from their record low level, according to Moneyfacts.co.uk.

The financial information provider said that, since the start of 2022 every equity release lennder, bar OneFamily, has increased their rates.

Lifetime mortgage rates have risen since the start of 2022, now 4.33%, the highest average rate seen this year, notably higher than March 2021 when it stood at a record low of 3.86%.

Figures from the Equity Release Council show total lending in 2021 climbed 24% year-on-year to £4.8 billion, up from £3.86 billion in 2020. The 2021 figure has surpassed the previous record, set in 2018, of £3.94 billion.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Consumers may wish to use the wealth locked up in their home as a way of funding retirement, or even to ease the rising cost of living this year.

“The equity release market boomed in 2021, during a time of record-low rates in the sector and rising house prices, records show total lending reached a three-year high of £4.8 billion.

“However, interest rates charged on lifetime mortgages are rising this year, and this means unlocking equity out of a home may now be at a higher cost than if someone locked into a deal last year. Indeed, in March 2021 the average equity release rate hit a record-low of 3.86% but has since risen to 4.33%.

“Seeking advice from an independent broker is not only wise to assess all the options out there, but also to ensure it’s the right choice for both the homeowner and their relatives. Taking a lifetime mortgage will impact inheritance and while some homeowners may feel pressured to make a decision amid rising interest rates and living costs, careful thought and planning is a must before they make any arrangement.”