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Equity release interest rates rise

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The average equity release interest rate has risen to 4.26%, climbing from 3.95% over the last six months. This comes with lenders offering more deals with flexible features that come at a higher cost to borrowers. Analysis shows that product numbers increased by 49% from 448 to 668 in the first half of the year, with more access to higher loan to value (LTV) deals and more deals offering the option to pay some or all of the interest each month or choose between fixed or gilt-linked early repayment charges. The Equity Release Council report shows that there were 86 more deals priced at 4% or more in July compared to the same month last year. There were 189 deals with an APR of 4% or lower in July 2020 compared to 275 in July 2021. According to the council, the UK is now carrying over £1.5trn of mortgage debt for the first time on record, while rising house prices and record levels of mortgage repayments have increased homeowners’ property wealth from £4.21trn in H1 2020 to £4.87trn in H1 2021.

 

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