The Mortgage Mayhem: Are Equity Releases the Silver Bullet for Boomers

A Deep Dive into How Over-55 Homeowners are Pivoting amidst the Growing Mortgage Rate Turmoil

Key Takeaways:

  • Over a third of homeowners aged 55+ apprehensive about meeting mortgage repayments amidst the cost-of-living crisis.
  • 55Plus, an equity release specialist, reports a surge in industry-wide cases this year, attributed to rising mortgage rates.
  • Recent data reveals almost half of all equity release applications in Q1 2023 were for remortgaging.

A Brewing Storm: The Mortgage Landscape

An announcement from the Bank of England set the nation on high alert: mortgage payments are set to skyrocket by at least £500 a month for nearly a million households by 2026. As if that weren’t alarming enough, mortgage stress is reaching highs reminiscent of the tumultuous 80s.

But why are boomers particularly on edge?

A significant fraction, almost one in three, of borrowers over 55 fear that the escalating cost-of-living crisis will hamper their repayment abilities. With over 3.3 million individuals over 55 yet to clear their mortgage, the future seems daunting.

A Glimmer of Hope: Enter Equity Release

Unknown to many, there’s a lifeline that many homeowners over 55 can grasp – Equity Release. Recognized for their industry acumen, national equity release specialist, 55Plus, reports an upsurge in equity release cases this year. The correlation? The unprecedented hike in residential mortgage rates.

“For over a decade, homeowners enjoyed residential rates at a mere 0.75% or even lower,” reveals Jan Johnson, the visionary behind 55Plus. Today, those with ending fixed deals or those on tracker mortgages face financial turmoil, with some even grappling with the idea of losing their homes.

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The twist? The current average residential rate on a two-year fixed deal has breached a 15-year record, touching a staggering 6.66%. The anticipation of further hikes is not helping the situation either.

By the Numbers: Equity Release in 2023

55Plus, with data from financial giant Canada Life, unveils a compelling statistic: A whopping 44% of all equity release applications between January and March 2023 were centred on remortgaging.

Steven Scales from Canada Life sheds light on the figures, pointing towards the alarming rise in interest rates paired with an enduring cost of living crisis. The result? Homeowners either facing the harrowing possibility of repossession or being compelled to sell.

However, equity release emerges as a beacon of solace. With property values on the rise, equity release offers homeowners 55 and above a viable solution, granting them financial peace.

Equity Release: What’s the Catch?

For the uninitiated, equity release is more than just a financial instrument. It offers flexible repayment options – from making no payments to overpaying the interest. This flexibility has made it a darling among those aged 55+, who seek to tap into their home’s value without selling it, all while ensuring they can continue to reside there for the long haul.

A Case in Point: Mr. Philip Jenner’s Story

Imagine the ordeal of a 70-year-old, Philip Jenner from Quedgeley, Gloucestershire. Faced with potential repossession, with a wife and young daughter by his side, the mortgage rate crisis hit him hard. With mortgage repayments about to triple, things looked bleak.

But all was not lost. Mr. Jenner’s path crossed with 55Plus adviser, Ian Akeroyd. A scheme finalized in July offered Mr. Jenner the relief he desperately sought, freeing him from looming mortgage payments.

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His words resonate with many, “Banks should step up more. While I understand they’re not charitable entities, a bit more support wouldn’t hurt. Situations like mine are not isolated, and many are grappling to find a way out.”

Wrapping Up

The mortgage landscape might be tumultuous, but solutions like equity release provide a glimmer of hope for many. With experts like 55Plus at the helm, perhaps there’s a way forward after all.


About 55Plus:
Situated in Tunbridge Wells, Kent, 55Plus is a torchbearer in providing comprehensive equity release solutions. Catering to diverse needs, from home improvements and debt clearance to helping friends and boosting later life finances, 55Plus has carved a niche for itself, serving clients across the UK.


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