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Equity release news
SHIP: Mainstream lenders 'can't compete'
7 February, 2008
The gap between average equity release rates in comparison to mainstream lenders' SVRs has grown by 1.10 per cent in six months, Safe Home Income Plans (SHIP) has reported.
Reverberations from the credit crunch have impacted hard on mainstream mortgage pricing, but the equity release sector appears to have blossomed in the face of market turmoil.
Indeed SHIP figures show that the average rate of annual interest for the top ten equity release providers is currently 6.35 per cent, whilst the average lender SVR has increased by 0.13 per cent since May to 7.45 per cent.
This boils down to the long-term pricing structure of equity release plans which allows interest rates to remain lower regardless of economic instability.
SHIP believes that these developments have made equity release a much cheaper option for the over 55s who want to consolidate debts or improve their standards of living, compared to many of the alternatives.
At the moment, SHIP's top three comprise Stonehaven's Lump Sum Lite at 6.06 per cent, Just Retirement's Roll-up Equity Release Plan at 6.15 per cent and Prudential's Increasing Cash Reserve at 6.29 per cent.