EQUITY RELEASE RATES CONTINUE TO RIVAL THOSE OF TOP MORTGAGE LENDERS’
Following research conducted last year, SHIP, the trade body representing over 90% of the equity release sector, has today announced updated figures showing that equity release rates continue to offer good value despite increases in the Bank of England base rate.
Updating research findings from September 2006, SHIP confirms that the average rate for equity release continues to be considerably lower than the average standard variable rate for mainstream mortgages.
The average rate of interest for the top ten equity release providers is currently 6.39%.However,the average SVR rate for the top ten mainstream mortgage lenders is now 7.32%.There is now 0.93% difference between the two rates, compared to only 0.35% difference in September 2006 (average equity release rate Sep 06 – 6.14%, average SVR rate Sep 06 – 6.49%).
The rates offered by SHIP lifetime mortgage providers are fixed for life and also factor in a no negative equity guarantee. These updated figures confirm the competitive position of lifetime mortgages against the mortgage market as a whole.
Table 1:Top Ten Lifetime Mortgage Rates*
Date correct at: 18th May 2007
Table 2:Top Ten Mortgage Lenders Standard Variable Rates**
Date correct at: 18th May 2007
Jon King, Chief Executive of SHIP commented:
“This further research by SHIP continues to counter critics’ claims that equity release lending is prohibitively expensive and an option of last resort. Since April this year the whole of the equity release market has become fully regulated by the FSA. SHIP has also continued to campaign to raise the standards of advice available to consumers through calling for compulsory examinations for IFAs offering SHIP members’ products and issuing advice checklists adhering to a stringent code of conduct.With these rising standards and the low interest rates highlighted above, it has literally never been safer or cheaper to take out equity release and in many cases it can offer a very viable solution to older peoples’ financial needs.”
-ENDS¬All data, excluding Scottish Widows, from The Exchange Scottish Widows data from www.scottishwidows.co.uk.Correct as of 18/05/2007
* Data from Moneyfacts. Correct as of 18/05/2007
For further information, please contact:
Emma Bowden/ Laura O’Connell The Wriglesworth Consultancy Phone: 0207 845 7900
Notes to Editors:
About SHIP:
Safe Home Income Plans (SHIP) is the UK’s leading professional body for equity release product providers, representing the interests of its 21 members who provide home income and equity release plans. It was launched in 1991 to promote safe schemes. At present, 90% of the equity release market (in volume terms) is represented by SHIP members.
SHIP’s current 21 members* are: Bradford & Bingley plc, Bridgewater Equity Release, Bristol & West Mortgages, Ecclesiastical Life, Hodge Equity Release, Home & Capital Trust, In Retirement Services, Just Retirement, Key Retirement Solutions, National Counties Building Society, New Life Mortgages, Northern Rock, Norwich Union, Partnership Home Loans, Portman Building Society, Prudential, Retirement Plus, Standard Life, Stonehaven Equity Release, Stroud & Swindon Building Society, Tomorrow.