Equity release customers cut their interest costs by millions as new product standard takes effect – Equity Release Council

From Monday 28 March, all new equity release customers can benefit from a product feature that has already enabled borrowers to reduce their interest costs by tens of millions of pounds.

The option to make penalty-free partial loan repayments has become an increasingly common feature of modern equity release products, helping customers to balance the effects of compound interest and cut their borrowing costs in later life.

This option has now been made a fifth ‘product standard’ or prerequisite for all plans recognised by the Equity Release Council, the representative sector body.

To mark the milestone, the Council will publish new data on Monday showing existing customers have saved almost £100m in future interest costs by making penalty-free partial repayments last year.

For an early copy of the findings and to arrange an interview with a Council spokesperson, please contact equityreleasecouncil@instinctif.com

About equity release

Equity release allows people aged over 55 to borrow against the value of their homes without making repayments, unless they choose to, with the interest and loan usually settled when the customer passes away or moves into permanent care.

Over 76,000 new or returning customers used equity release products in 2021 to access money from their property to help meet their financial needs or provide a ‘living inheritance’ to family members.

About the Equity Release Council

The Equity Release Council is the representative trade body for the UK equity release sector with almost 700 member firms and more than 1,550 individuals registered, including providers, funders, regulated financial advisers, solicitors, surveyors and other professionals.

It leads a consumer-focused UK based equity release market by setting authoritative standards and safeguards for the trusted provision of advice and products. Since 1991, homeowners over the age of 55 have taken out more than 592,000 plans backed by Council standards, enabling them to access almost £39bn of housing wealth to support their later life finances.

The Council also works with government, voluntary and public sectors, and regulatory, consumer and professional bodies to inform and influence debate about the use of housing wealth in later life and retirement planning.