Average equity release rates reached a record low of 4.11% in July 2020, according to the Equity Release Council.
The trade body added that over half of products now offer a rate of 4% or lower, and a fifth charge interest rates below 3%.
There’s been a rise in product choice too – up 29% from July 2019 and by 88% since the start of 2019.
Sales impacted by Covid
However, the sector has inevitably been affected by the global pandemic and sales of new equity release products fell 15% in the first half of 2020 compared to the same period in 2019.
Claire Singleton, CEO of Legal & General Home Finance, said: “Record low rates and more choice are clearly in the customer’s interest, but given many could be vulnerable due to financial stress, it even more important for them to pause, take advice and avoid reacting hastily to financial concerns.
“While fantastic progress made by the sector has brought equity release into the mainstream, homeowners should still have an open conversation with their adviser and remember that equity release is a long-term product.”
David Burrowes, chairman of the Equity Release Council, added: “As the UK’s ageing population seeks to fund increasingly longer retirements, property wealth can play a fundamental role for many people, both now and in the future, as part of a more joined-up approach to planning for retirement.
“The challenges that lie ahead show no signs of easing, so it is important that people are aware of all the options available to them to help fund later life.”
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