Paying off your mortgage with Equity Release

Recent data from major insurer Canada Life found that paying off your mortgage with equity release was the most popular reason for taking out equity release.

The customer data revealed that 50% of applications in the first six months of 2022 were from customers looking to clear their mortgages.

Paying off your mortgage with Equity Release was the most common reason for releasing equity. Alice Watson, head of marketing (insurance) at Canada Life, comments on the results.

“Surging inflation and a rising cost of living are understandably encouraging many people to take stock of their wealth and where it sits.”

The reasons

Watson continued by saying, “Understanding why customers seek to release equity from their homes can provide an exciting snapshot into the lifestyles and needs of our customers.

From the first six months of the year, we can see that the desire to clear an existing mortgage is a strong driver to pursuing equity release.

We can’t ignore the significant proportion of people turning to equity release to cover their daily living expenses, the demand likely driven by the current cost of living crisis.

Despite this, customers are also keen to make home improvements, go on holidays and gift to friends and family.

This simply highlights the flexibility and accessibility of modern equity release products, allowing families to enjoy their retirements comfortably in a way that suits them.

However, equity release is a lifelong financial decision, so people must seek financial advice and discuss their decision with loved ones before agreeing to a product.”

One of the benefits of using Equity Release to pay off an existing mortgage is that you now have the option with many lenders to service the loan by making the interest payments. Hence, the debt always stays the same, as opposed to letting the interest roll up.

The flexibility and modern versions of Lifetime borrowing are why later-life lending is becoming more popular this year. Canada Life’s findings come from The Equity Release Council’s recently published data for Q1 2022.


  • The number of new and returning equity release customers reached a new quarterly high of 23,395 between January and March.
  • A total of 150,653 new and existing customers have been active during the pandemic, starting from Q2 2020, compared with 171,586 in the previous two years.
  • Annual growth in the number of new plans agreed recovered to 21% in Q1 from –9 % a year earlier.
  • Total quarterly lending reached £1.53bn between January and March, up from £1.34bn in Q4 2021
  • The average new loan size grew 6% year-on-year, matching the latest inflation figure¹ and surpassed by the 11% annual UK house price rise, adding £27,000 to the average home².

David Burrowes, Chair of the Equity Release Council, said: “The popularity of equity release this year is the natural result of modern products offering greater flexibility and a property market where growth has far outstripped inflation, alongside an ageing population.

Have your retirement plans changed since the pandemic?

Rising house prices can make a significant difference to people’s quality of life, especially after two years when the pandemic has subdued customer numbers.

Not only are more people considering equity release, but they are doing so for many different reasons and helping old and young alike to fund everyday costs and significant life events.

Innovation has made equity-release products more adaptable to customers’ changing circumstances. Our standards mean lifetime mortgages remain the most secure type of retirement home finance, with customers protected from interest rate rises, repossession and passing on debt due to negative equity.


Burrowes continued, “It remains vital that decisions are carefully considered through both a long-term and short-term lens, with family input wherever possible and with financial and legal advice in every instance.”

Spectrum Independent are proud to be a member of the Equity Release Council.