Top reasons for releasing equity in H1 2024

Clearing an existing mortgage (41%) remains the top reason for releasing equity, according to research conducted by Canada Life.

Home improvements rank highly, with 29% of their customers citing this as their main reason.

The top five reasons for releasing equity in H1 2024 were as follows:

• 1. Clear an existing mortgage (41.43%)
• 2. Home improvements (29.38%)
• 3. Holidays (21.73%)
• 4. Consolidate unsecured debts (21.07%)
• 5. Day-to-day living (19.37%)

Sadna Zaman, Proposition Development Manager, Home Finance, at Canada Life said: "Our customers continue to use equity release for a large variety of reasons, with clearing an existing mortgage and home improvements remaining the top two.

Day-to-day living is still in the top five, highlighting that customers may still have to offset increased outgoings caused by the cost of living crisis. However, we have seen an 8% increase of homeowners using the wealth they have built up in their properties to go on holiday in Q2 compared with Q1. This figure has risen by nearly 10% vs the same time last year (19.80% to 21.73%), demonstrating that customers are increasingly releasing equity to improve their lifestyle.

The variety of motivations for releasing equity highlights the flexibility and accessibility of the options available, allowing homeowners to enjoy their retirement in a way that best suits them and their families. However, equity release is a lifelong financial decision, so it’s vital that the long-term costs are considered."

Source: Canada Life, 2024. Reasons for loan given for initial advance applications. Customers were able to choose multiple options for their reasons for loan.