According to Moneyfacts every lender except for OneFamily has increased its product rates.
Average rates dropped to a record low of 3.86 per cent in March last year and this March, that has gone up to 4.33 per cent. Rates have climbed since the start of this year as in January, the average was 4.10 per cent.
However, March’s average rate is not too far off the 4.20 per cent recorded during the same month in 2020.
As rates fell to lows in 2021, lending in the equity release market reached record levels with a 24 per cent annual increase to £4.8bn. This was up on the total lending figure of £3.86bn in 2020 and the previous record of £3.94bn, seen in 2018.
The number of products on the market has also risen with 665 available as of this month, up from 661 in January and 492 in March last year.
The average maximum loan to value (LTV) available to borrowers stands at 51 per cent, compared to 48 per cent last year and 48 per cent in 2020.
Rachel Springall, spokesperson at Moneyfacts.co.uk, said: “The equity release market boomed in 2021, during a time of record-low rates in the sector and rising house prices, records show total lending reached a three-year high of £4.8bn. However, interest rates charged on lifetime mortgages are rising this year, and this means unlocking equity out of a home may now be at a higher cost than if someone locked into a deal last year.”
Springall said growing demand for equity release had encouraged lenders to adapt their ranges to suit varying circumstances.
She added: “There are currently over 600 different lifetime mortgage options available to consumers, so navigating these could be a difficult process without advice.
“Seeking advice from an independent broker is not only wise to assess all the options out there, but also to ensure it’s the right choice for both the homeowner and their relatives.”
