Lifetime mortgage popularity soars amongst wealthy homeowners

The price of a property OneFamily lends on is now 59% higher than average, at £370,483 versus a nationwide price of £232,554.

Regionally there are significant variances with the average price of a home in London being used to release capital now £816,000, compared to the average property sold in the area being £482,000. In the South East, the value of properties being lent against is £493,000 versus a regional average property cost of £328,000

The lender says the data, combined with a falling average age of a lifetime mortgage customer to 68, shows that homeowners are making a proactive decision to make the most of their largest asset.

Instead of being used in later life to pay for essential costs, OneFamily says lifetime mortgages are increasingly being used as part of holistic retirement planning alongside pensions, and for paying for lifestyle goals.

Nici Audhlam-Gardiner, managing director of lifetime mortgages at OneFamily, said: “As the data shows, equity release is no longer a reaction for consumers to make up a savings shortfall but rather a proactive decision to make the most of their largest asset. Many older homeowners have significant amounts of money tied up in their homes and want to be able to enjoy their later years. This also means we are seeing a younger generation of customers who are at the point of retirement and want to realise their lifetime dreams whilst they are still in good health.

“We are also seeing more diverse reasons for people to access the capital in their home, and many more accessing it to fund what could be seen as relatively luxury activities such as travel, buying second properties, and helping younger family members get onto the property ladder.

“The products that OneFamily offers are, in part, driving this trend, with many wealthier homeowners choosing a mortgage on which they can pay the interest monthly thus avoiding roll up costs. Homeowners taking out a OneFamily lifetime mortgage have the option to pay the interest back monthly, pay up to 10% of the total value of the loan each year or pay no interest until the end of the loan.”