Fewer equity release customers using property wealth to pay off mortgage debt

New data from L&G Home Finance has revealed a shift in how homeowners are using equity release, with far fewer turning to it to pay off debts.

The proportion of new customers turning to their property wealth to repay an existing mortgage has dropped from 31% to 19% of applications between H1 2024 and H1 2025. Similarly, the number using it to clear other debts, such as loans or credit cards, has fallen from 25% to 23%. 

Instead, equity release is being used to support quality-of-life spending and family priorities. Half (50%) of customers are using it to fund home improvements, while one in five customers (18%) are using their property wealth to support other family members in the form of a financial gift.

Mike Batty, product and proposition director at L&G Home Finance, commented: “Property wealth continues to be a useful tool for homeowners looking to fund later life and help achieve longer term goals. It’s encouraging to see people turning to the money tied up in bricks and mortar to improve their quality of life.   

“As a lender, we continue to work with advisers and the wider industry to ensure the best outcomes for people looking to benefit from accessing their property wealth. While not suitable for everyone, lifetime mortgage solutions can be an important consideration as part of a holistic approach to financial planning.”