Equity release being used to fund interest-only shortfall

UK equity release broker, Responsible Equity Release, says that over a third of its clients are using equity release to fund a mortgage shortfall.

The research by Responsible Equity Release found that 36% of its customers used their equity to repay a mortgage during 2011, up 31% on 2010. In the first two months of 2012, this trend has accelerated further.

Mortgage shortfalls were also a big factor behind a huge rise in homeowners enquiring about equity release during 2011. Last year, the total number of enquiries received by Responsible Equity Release rose by 91% on 2010.

Steve Wilkie, managing director, Responsible Equity Release, said: “We have seen a sharp increase in the number of people releasing equity in order to settle a shortfall on an interest-only mortgage. With the vast numbers of interest-only loans due for repayment in the years ahead