Needs-driven borrowing surges as younger demographics reshape the market
Borrowers under the age of 70 now account for 55% of all new lifetime mortgages. Data from 2025 highlight a significant increase from just 36% two years earlier[1]. Meanwhile, borrowing among those over 80 has fallen sharply, to 7% in 2025 from 15% in 2023.
This changing demographic shows a clear trend towards needs-based borrowing. Repaying existing debts and clearing standard mortgages are now the main reasons for taking out these financial products. In fact, 28% of new lifetime mortgages in 2025 were used for these specific purposes, up from 24% in 2024 and 22% in 2023.
Property values and lending patterns
The types of homes involved in these transactions remain relatively stable. Mid-value properties, defined as those worth between £250,000 and £400,000, accounted for 37% of new plans in 2025. Market analysts note this figure has stayed broadly consistent over the past three years.
Similarly, high-value properties worth at least £700,000 accounted for 10% of new lifetime mortgages, maintaining the steady pattern observed since 2023.
Unlocking property wealth
Meanwhile, the proportion of homeowners using equity release mainly for home improvements has slightly decreased. Only 22% of customers cited property upgrades as their main reason in 2025, down from 24% the previous year and 25% in 2023.
Other common motivations for unlocking property wealth include funding holidays at 9%, purchasing cars at 8%, and gifting money to family members at 7%. Both holidays and gifting have experienced slight declines from their recent peaks.
How a lifetime mortgage works
Equity release through a lifetime mortgage enables homeowners aged 55 or older to access some of the value tied up in their property without needing to sell it. With this type of mortgage, you borrow a portion of your home’s value, which is typically tax-free, while maintaining full ownership of the property.
The loan, along with any accrued interest, is usually repaid when the homeowner passes away or moves into long-term care. Unlike conventional mortgages, there are no monthly repayments required unless you choose to make them, as the interest is rolled up and added to the loan balance over time.
Seeking professional advice is essential
The amount you can release depends on factors such as your age, the value of your property, and your health. Many lifetime mortgages also offer flexible features, like the ability to make voluntary repayments to reduce the overall cost or to protect part of your home’s value as an inheritance.
It’s important to note that equity release decreases the value of your estate and may affect your eligibility for means-tested benefits, so seeking professional advice is essential to ensure it suits your financial goals and circumstances.
Achieving your financial goals
It is apparent that current lending is mainly driven by practical financial needs rather than discretionary spending. Younger borrowers are increasingly aiming to secure their financial stability and cover their immediate expenses. This trend is balanced by steady activity among property owners valued at over £1 million, who consistently account for about a tenth of the market.
Ultimately, homeowners of different ages and property types feel confident using their housing wealth to achieve their long-term goals. Seeking professional advice ensures this approach is suitable and helps improve the financial wellbeing of people over 55.
Source data:
[1] Pure Retirement data 26 March 2026
