Scots 'increasingly using equity release'
26 November 2012
Homeowners in Scotland are increasingly using equity release in order to improve their situation in their retirement, according to new figures from Key Retirement Solutions.
It was noted that around 80 per cent of borrowers with interest-only loans maturing over the next decade do not have a repayment plan and risk entering retirement with mortgage debts, with equity release plans among the options available to them.
According to a report by the Scotsman, the popularity of equity release is set to soar as a result, with data from provider Key Retirement Solutions showing the number of households taking out the plans is already on the rise.
Increase in plans
Over 270 equity release plans were sold in Scotland in the three months to the end of September, with a total of £11.3 million of housing equity released through the products, which is up 65 per cent on the same period last year.
Alison Mitchell, mortgage expert at Robson Macintosh, an Edinburgh-based independent financial adviser, stated those in the sector are increasingly speaking to homeowners who are interested in unlocking money from the value of their properties.
"Many over-55s, a generation predominantly linked with endowment mortgages, are faced with the realisation that they need to find thousands of pounds once their mortgage term expires," she was quoted as saying by the newspaper.
Take advice
Ms Mitchell stressed that those who are considering using equity release to improve their financial situation should take advice from an expert before they make any decisions, but she said it could be a "great" option for people coming to the end of an interest-only loan in the coming years.
According to the latest Key Retirement Solutions Equity Release Market Monitor, it is expected that the industry will break through the £1 billion mark for the year in the coming weeks.
Those seeking more information about equity release as they sum up their options can use our free equity release calculator, or get in touch with the specialists at Key Retirement Solutions for details.