New research has found that equity release is used by the elderly mainly to improve their home or pay off their debts – proving how flexible secured borrowing can be.

Key Retirement Solutions has found that equity release borrowers in the North are also most likely to spend the cash released from their home on improving them 69%, followed by the North West 67% and Yorkshire & Humberside 66%

It also found that the North and London are the most generous regions as 16% of those who opt to release equity in their home give some of the cash released from their homes via equity release as a gift to their families. But then it appears those in the North are also more focussed on their lifestyles, as nearly two thirds (58%) spend the money released from their home on holidays.

For those people with a property value of less than £200,000 home improvement is their biggest priority, which comes before repaying debts or mortgages. Looking at all property values those which stand at less than £200,000 are more likely to spend the cash on a holiday than any other value of property.

KRS also found that, as can be expected, those with a property value of more than £750,000 are the most generous, as a quarter give some of the cash as a gift to their family.

Dean Mirfin, KRS business development director says: “The most popular reasons at all ages do not come as a great surprise, being home improvement, repaying debt and holidays. Whilst few appear to release equity for an extra monthly income, many incomes are directly improved by the repayment of debt.

“The figures continue to show, that for the many thousands in or approaching retirement, the need and desire to release equity is targeted at those outcomes which will have a dramatic, positive, effect on their standard of living.”

If you think you could benefit from using equity in your home in your retirement years, talk to your mortgage adviser today about the potential that is sitting in your home.

SOURCE: KRS, 09/03/09

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