Equity Release Market: Equity release products allow homeowners to access the equity in their property, usually through a lifetime mortgage. As interest rates rise, the cost of borrowing will increase, potentially making these products less attractive to consumers. However, rising gilt rates can also lead to an increase in the value of the property, which could offset some of the higher costs of borrowing.

Consumer Borrowing: Higher interest rates can also affect consumer borrowing more broadly. For example, credit card debt and personal loan rates are often linked to the Bank of England base rate, which is influenced by gilt rates. This means that consumers will have to pay more to borrow money, which could lead to a slowdown in borrowing and spending. Everyone’s budget is feeling the squeeze and possibly using a lifetime mortgage may reduce some of the financial pressure.

Overall, the impact of rising gilt rates on the equity release market and consumer borrowing will depend on a range of factors, including the level of the increase, the overall economic climate, and consumer confidence. There is no doubt that the amounts available to borrowers using lifetime mortgages is currently less and rates are higher. There’s never been a more important time to ensure that ‘if’ you are considering a lifetime mortgage you take independent, professional advice from a responsible advisor who may advise you not to consider this option at this time !

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