As a Surrey equity release mortgage specialist, we’ve seen equity release significantly rise in popularity over recent years.

From its relatively humble beginnings, the equity release market is now at its largest, with total lending peaking at £6.2bn in 2022 – up 29% from £4.8bn in 2021*.

Interestingly, as a Guildford mortgage broker that’s secured equity release mortgages for countless clients over recent years, one thing that we’re quite often asked is ‘how flexible are equity release mortgages?’.

Until a couple of years ago, our answer might have been ‘not very’, as interest on the mortgage would generally accrue over its lifetime and only be paid back when the mortgage holder either sold their property or died.

The 10% rule

These days, equity release mortgages have voluntary repayment options that are similar to fixed rate mortgages in as much as the mortgage holder can make overpayments of up to 10% of the balance each year – without incurring any redemption charges.

This extra layer of flexibility means that holders of equity release mortgages – or lifetime mortgages – can simultaneously enjoy any property wealth the mortgage has unlocked whilst making affordable repayments on their own terms.

After all, coming into money, be it through inheritance or any other means, isn’t exclusive to those under 55 years old. It also happens to those of us aged 55 and over, too. And, if it happens, you may want to use some of it to pay off your equity release mortgage – a move that will ultimately save you many thousands of pounds in interest in the long term.

Benefitting the borrowers, not just the banks

The flexibility rule, which was made compulsory by the Equity Release Council – the UK’s industry body for the equity release sector – has already brought about positive change and made equity release borrowing even more attractive for those who want to release some of the property wealth they’ve accrued over the years without selling their home.

Figures released by the organisation show that over 90,000 people made over 190,000 voluntary – and therefore penalty-free – repayments in 2022. In pounds and pence, this equated to £102 million and was up 48% on voluntary repayments from 2021.

In our view, this shows that what is already a strong mortgage product is getting stronger. Take the same figures from the Equity Release Council, for instance. The long-term savings made by homeowners for simply making early voluntary repayments totals came to £116 million in interest alone.

So, are equity release mortgages flexible? Whilst they’re not as flexible as tracker mortgages, the intervention from the Equity Release Council has made them much more flexible and we welcome the changes. Judging by the figures, it looks like equity release homeowners do, too. 

Thinking of getting a lifetime mortgage? Then contact our Guildford equity release mortgage team on 01483 238280 or by e-mailing info@complete-mortgages.co.uk.

*Equity Release Council