The average rate for equity release is considerably lower than the average standard variable rate for mainstream mortgages, equity release trade body Ship has claimed, reports Financial Adviser (24/5/07).
It calculates that the average rate of interest for the top 10 equity release providers stands at 6.39 per cent, while it puts the average standard variable rate for the top 10 mainstream lenders at 7.32 per cent.
Ship reported this 0.93 of a percentage point difference between rates had grown since it last made such an analysis in September 2006, which showed a difference of just 0.35 of a percentage point.
Jon King, chief executive of Ship, said: "This further research by Ship continues to counter critics' claims that equity release lending is prohibitively expensive and an option of last resort. Since April this year, the whole of the equity release market has become fully regulated by the City watchdog.
"Ship has also continued to campaign to raise the standards of advice available to consumers through calling for compulsory examinations for IFAs offering Ship members' products and issuing advice checklists adhering to a stringent code of conduct. With these rising standards and the low interest rates highlighted above, it has literally never been safer or cheaper to take out equity release."
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