What homeowners are really using equity release for in 2026

Home improvements: still the top reason

Canada Life’s H1 2026 data shows that 43% of customers releasing equity gave home improvements as their primary reason — a figure that has held steady since 2025. The consistency matters: home improvements are not a trend but an established use case. For homeowners who want to adapt their property for later life (accessibility modifications, energy efficiency upgrades, extensions), who cannot afford to fund that work from savings alone, and who are not willing to sell or downsize, releasing equity from the property itself is a direct and practical solution.

The range of what people mean by “home improvements” is broad. At one end, there are structural projects: new roofs, extensions, rewiring, damp-proofing — the kind of work that increases the property’s value and habitability but costs tens of thousands of pounds. At the other end are adaptations specifically for ageing in place: wet rooms, stairlifts, wider doorways, ground-floor bedroom conversions. Both categories sit under the same umbrella in the data, but they reflect the same underlying reality: many older homeowners are asset-rich but cash-constrained when it comes to their own homes.

Paying off an existing mortgage: the fastest-growing reason

The more striking trend in the Canada Life data is the rise in applicants using equity release to repay an existing mortgage. This reason accounted for 30% of H1 2026 applicants, up from 27% across all of 2025 — and notably, the proportion rose during the half year, from 27% in Q1 to 32% in Q2. The direction of travel is clear.

The reason for the increase is straightforward. A significant number of homeowners who took out interest-only mortgages in the 2000s and 2010s are now in or approaching their 60s, with repayment vehicles that have underperformed or with no clear plan for clearing the capital. As those mortgages mature or approach maturity, equity release is one mechanism for clearing the balance and removing the monthly payment obligation — provided there is sufficient equity in the property to do so.

For homeowners in this situation, clearing an existing mortgage through a lifetime mortgage can reduce monthly outgoings significantly and remove the risk of being required to sell the property if the original mortgage cannot be repaid. The total cost over a long time horizon is different from a repayment mortgage, but the cashflow benefit can be material in the short and medium term.

Discretionary uses are declining

The Canada Life data also shows a clear shift away from discretionary spending as a primary reason for releasing equity. Holiday funding fell from 26% of 2025 applicants to 21% in H1 2026. Gifting to family fell from 19% to 15%. These are still meaningful proportions — supporting family members financially or funding a significant trip remain legitimate and common uses — but the direction of change suggests that as the market matures and more homeowners approach equity release with a financial planning mindset rather than an impulse, the primary reasons are becoming more structural and less discretionary.

This shift is consistent with the market’s overall growth trajectory. Total UK equity release lending reached £2.57 billion in 2025, up 11% year-on-year, and H1 2026 applications and enquiries are running ahead of the same period last year. A larger, more established market tends to attract a broader range of customers — including those who are using equity release as a deliberate financial planning tool rather than as an impulse response to a specific spend.

“The data shows homeowners are approaching equity release more strategically than they were five years ago — using it to solve specific financial problems rather than simply to access a lump sum.”

What this tells us about how the market is evolving

Taken together, the 2026 data paints a picture of a maturing product being used for increasingly practical purposes. The shift toward structural needs — home improvement and mortgage repayment — and away from one-off discretionary spending reflects a broader change in how homeowners are thinking about their property wealth: not as a windfall to spend, but as a financial resource to manage alongside pensions, savings, and other assets.

For homeowners who are at the stage of wondering whether equity release might be relevant to their own situation, the most useful starting point is understanding what the product actually involves — how interest compounds, what the no-negative-equity guarantee means, how it interacts with inheritance and benefits — before deciding whether any of the specific use cases apply to them.