Interest rates for equity release are increasingly competitive by comparison with standard mortgage interest rates, equity release sector body Safe Home Income Plans (SHIP) has revealed.
In spite of the latest quarter-point base rate increase, average rates for equity release are "considerably lower" than the average standard variable rate (SVR) on mainstream mortgages, its figures showed.
Average interest rates for equity release products are at 6.39 per cent while SVR rates from mainstream mortgage lenders average at 7.32 per cent, SHIP revealed.
Moreover, the relative competitiveness of equity release rates has increased in recent months, as the gap between equity release rates and average SVR rates widened from 0.35 per cent in September 2006 to a 0.93 per cent gap today.
While critics claim that equity released lending is "prohibitively expensive and an option of last resort", these figures may suggest otherwise, SHIP's chief executive Jon King commented.
Equity release can offer "a very viable solution to older peoples' financial needs" in many cases, he added.
The equity release market came under Financial Services Authority regulation for the first time last month.
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