The Coronavirus pandemic changed how customers used equity released from their homes in 2020, according to new research.

Customers have moved away from using equity release to fund new cars or holidays and are instead buying new homes or making home improvements, according to Canada Life’s customer data.

There was a dramatic increase in the number of customers using equity release to buy a new property in the second half of 2020.

In Q1 and Q2 2020 this represented 8% and 6% respectively of equity release customers but this more than doubled in Q3 to 16% of loans and 18% of applications in Q4.

However, using equity release to cover essential spending remained the most popular use for equity release funds. Almost half of loans (45%) were used to pay off the mortgage, a quarter (24%) on consolidating existing debts and almost a fifth (18%) on funding day-to-day living.

One of the most popular reasons to release equity in 2020 was to fund home improvements. Two fifths of customers chose to release equity for this reason. 

Canada Life surveyed equity release customers taking out loans across 2020. Customers could cite more than one reason for taking out a loan.