Bridgewater Equity Release has released a report this month showing the results of their study into why people choose to release equity from their homes and how their extra cash is used. 43 per cent said it was to pay off a current mortgage.
Examining their own customers’ sales and additional advances over the course of last year, Bridgewater discovered the top five purposes were to:
1 – pay off the current mortgage (43 per cent)
2 – for improvements to the home (31 per cent)
3 – to consolidate other loans or debt (27 per cent)
4 – to travel (19 per cent)
5 – to purchase a car or repair a current one (12 per cent)
Those responding to the survey were allowed to pick one reason or more.
This isn’t the first such report Bridgewater has undertaken and compared with the results of earlier surveys, it seems the top 3 reasons had become more popular in recent years. There was a range of other reasons cited, such as wanting the cash now to gift to a relative for a house deposit or wedding, to improve their lifestyle, to provide financial security or a safety net and to fund a divorce or separation. Perhaps surprisingly, only 1 per cent wanted the money to fund long term care.
To advise on equity release schemes, a person must first have their CeMAP qualification to become a mortgage advisor and then they must undertake additional study to gain their CeRER qualification.
As the Government continues to make cuts and our population ages, equity release is likely to become an increasingly popular option.