Top reasons for equity release in 2022 revealed: Canada Life

By: ameer@trustedteam.com

Paying off an existing mortgage remained the number one reason for releasing equity in 2022, according to new research from Canada Life.

The annual data looks at the top motivations for its homeowning customers to release equity from their properties.

It found almost half (49%) used the finance to clear an existing mortgage, which is a slight increase on 2021 (46%) and 2020 (45%).

In second place again was home improvements with 32%, although this figure continues a slight downward trend, falling from 34% in 2021 and 37% in 2020.

As the cost-of-living crisis continues, there’s also been a slight increase in the number of people using equity release to support day-to-day living costs, with 20% citing this as the reason for the finance.

This puts day-to-day living in third place for the second year in a row. It’s followed by consolidating unsecured debt (16%) and holidays (15%). Another 12% bought a new property and one in ten used the cash for a new car.

We recently reported how 2022 was a milestone year for equity release, with a record 93,421 homeowners aged 55 and over using new or existing lifetime mortgages to withdraw £6.2bn of property wealth.

Canada Life UK head of marketing communications Alice Watson comments: “Customers continue to use equity release in a wide variety of ways, from home improvements to consolidation to paying off existing mortgage borrowing. As the ongoing cost-of-living crisis unfolds, many customers are taking stock of their finances, including the wealth tied up in their homes.

“The variety of motivations for releasing equity highlight the flexibility and accessibility of the options available, allowing homeowners to enjoy their retirements in a way that best suits them and their families. However, equity release is a lifelong financial decision, so it’s vital people seek the help of a financial adviser and discuss their decision with their loved ones before taking out a product.”

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