Sales of lifetime mortgages were up 29% in March compared to the same month a year earlier, according to Quilter.

The financial adviser and wealth manager analysed data from the Financial Conduct Authority to show that, in March 2022, 5,052 lifetime mortgages, were sold compared to 3,930 last March.

The data also revealed that the most popular loan-to-value band for lifetime mortgages is 10-20% with an average of 988 mortgages sold per month since 2020, compared to just 53 in the 50-60% LTV band.

Karen Noye, mortgage expert at Quilter, said: “These figures show that equity release is soaring in popularity. While there is a place in the market for these types of products it’s essential that people use them for the right reasons. The cost-of-living crisis is biting, and it is worrying to think that people are ripping equity out of their homes just to pay their monthly bills.

“One of the benefits of equity release is that if you don’t want to leave your home then this product can allow you to release capital but still live in your property.”

Mounting costs

However, Noye warned: “Lifetime mortgages do carry a significant risk that you may end up owing far more than you borrowed when the home comes to being sold. This is because this type of mortgage charges compound interest and if you don’t keep up with regular payments then the entire sum will compound.

“Therefore, you should be cautious when working out whether this product is right and make sure you seek professional advice to decide if it’s the right choice.”