More homeowners releasing equity to clear existing mortgages

Home adaptations and improvements remains the top reason for releasing equity, with 43% of customers citing this as their primary motivation in the first half of 2026, data from Canada Life shows.

There has also been an upward trend of customers releasing equity to clear an existing mortgage, with 30% of applicants citing this purpose in H1 2026, up from 27% in full year 2025. The proportion of customers citing this reason also rose quarter on quarter, from 27% in Q1 2026 to 32% in Q2 2026.

However, this remains below the peak seen five years ago, when almost half of customers (46%) were releasing equity to clear their mortgage.

Intergenerational gifting continues to be a core priority for borrowers, although volumes have moderated compared to last year. Gifting to family accounted for 15% of applications in H1 2026, down from 19% in 2025, as more customers redirect housing wealth towards clearing mortgages, consolidating debt and strengthening their overall financial position. Despite easing this year, gifting to family remains elevated from previous years – accounting for 11% of applications in 2022 and 10% in 2023.

Use of equity release for discretionary spending such as holidays has also moderated. In the first half of 2026, 21% of customers cited holidays as a key reason, down from 26% in full year 2025.

Similarly, other discretionary uses, including car purchases and additional property purchases, have fallen back compared with last year’s data, as customers refocus on essential needs and long-term financial security.

Sadna Zaman, home finance proposition manager at Canada Life, said: “Home adaptations and improvements remains the most popular reason for releasing equity, with customers using lifetime mortgages to help fund changes that allow them to stay in their own home and enhance their quality of life in retirement.

"The data also shows that appetite for discretionary spending on things like holidays has cooled in the first half of this year amidst ongoing cost-of-living pressures and market uncertainty. Instead, customers have increasingly been looking to build financial resilience by consolidating debt, building an emergency fund, or clearing an existing mortgage.

“The wide variety of reasons underlines the flexibility of equity release as a solution, and the importance of careful, tailored advice. With comfort, financial security and intergenerational planning all competing, advisers have a crucial role in helping clients weigh these different priorities and show how property wealth can fit into a broader, holistic retirement strategy.”