SHIP, the UK equity release industry body representing more than 90% of the Equity Release sector, today announced new research showing that average equity release rated are now lower than the average standard variable rate for mainstream mortgage offerings.

Examining the annualised rated for the top ten equity release providers, SHIP has calculated the average interest rate to be 6.14%. In contrast, the average standard variable rate for the top ten mainstream mortgage lenders is now 6.49%. In addition, the interest rate for equity release remains fixed for the life of the loan, unlike mainstream mortgages which can fluctuate in line with any change in the base rate.

Table 1: Top Ten Lifetime Mortgage Rates*

Table 2: Top Ten Mortgage Lenders Standard Variable Rates**

Given the long term nature of the funding for this type of products these rates are even more competitive when you consider these rates are fixed for the entire term of the mortgage, regardless of any change to the Bank of England based rate.

Jon King, Chief Executive of SHIP Commented:

“It has never been easier, safer or cheaper to take out equity release and these latest figures show just how far the industry has come, The fact that the average interest rate from the top ten equity release providers is LOWER than the average form the top ten mainstream lenders delivers a solid rebuff to critics who claim this type of lending is prohibitively expensive and an option of last resort. It is clear that equity release compares favourably with many mainstream mortgage products and, for many people, offers a viable solution to their financial needs.”

*Data form The Exchange. Correct as of 18/08/2006

** Data from www.cml.org.uk/smi/statistics : Largest Mortgage Lenders 2005