A fall in the 15-year gilt yield following the Chancellor’s Budget could give lifetime mortgage lenders room to improve pricing and increase LTV options, industry leaders say
A slight dip in the 15-year gilt yield after Chancellor John Healey’s first Budget could give lifetime mortgage lenders more room on pricing and higher loan-to-values (LTVs), according to Will Hale, chief executive of later life lending platform Air.
The movement follows an easing in long-dated yields through October. The 15-year gilt yield reached 5.82% on October 8, 2026, a more than 20-year high, and stood at 5.62% on October 23.
“With lifetime mortgage pricing so closely linked to 15-year gilt yields, a stable fiscal backdrop is good news for equity release rates,” Hale said.
He said it was “heartening to see the Government put fiscal responsibility and stability at the core of its priorities”.
If that position holds or improves, Hale said lenders would have greater scope to improve pricing and the availability of higher LTVs, creating more options for advisers and their customers and supporting market growth.
During the Budget speech, the 10-year gilt yield edged down from 5.34% to 5.31%, though analysts said markets had yet to absorb the forecasts from the Office for Budget Responsibility (OBR).
Mainstream pricing has been broadly stable in recent weeks, with Moneyfacts putting average two- and five-year fixed rates at 5.97% and 5.99% on October 28.
Pricing only part of the advice picture
Hale said the Budget “could be considered an uneventful Budget” that missed an opportunity to address structural challenges in the property market, including how older customers’ housing wealth can be put to better use. He said its stability should improve confidence in long-term decisions such as later life lending.
He said rates matter to advisers and borrowers but are “only part of the consideration when it comes to advising customers on later life lending options”.
Modern lifetime mortgages let borrowers service all, some or none of the interest, he said, while events elsewhere in the world can have “a material impact on the cost-of-living pressures faced by UK households”.
Regulator turns to the intermediary channel
Hale said holistic advice “remains the defining challenge”, with customers often failing to engage or seeing only one section of the product landscape. This “has to change” if the over-55s’ £4 trillion of unencumbered housing equity is to help address some of society’s greatest challenges, he said.
According to the Financial Conduct Authority’s (FCA) terms of reference for its later life mortgages market study, more than 90% of lifetime mortgages and at least 60% of retirement interest-only (RIO) mortgages sold over the past three years went through an intermediary.
The regulator said its work may extend to standard mortgage brokers, even where they do not advise on lifetime or RIO products, and aims to publish a progress update by the end of 2026.
Hale said the industry “can’t afford to wait for regulators and government to act”, and must focus on “breaking down silos” through joined-up, product-agnostic conversations.
Older borrowers face a longer squeeze
Dave Harris, chief executive of more2life, called it “a cost of living Budget and a tacit admission from the Government that the financial pressures households are facing aren’t going away any time soon”.
He cited the OBR’s central forecast of inflation peaking at 3.8% in early 2027, up from the 2% it expected in March. He said that while this is well below the levels of the past few years, prices are still rising on top of increases that have already compounded.
Harris said people in their 50s, 60s and older feel these rises more than most, with many on lower incomes after reducing hours, moving to part-time work, passing peak earning years or retiring. He expects the squeeze to last “well into next year and beyond”, with seemingly no resolution in sight in the Middle East.
Over-55s hold around £4 trillion of property wealth, Harris said, and tapping into it “could be life-changing” for those struggling to make ends meet.
He added that the FCA’s study recognised that older homeowners may increasingly need that wealth for financial security, with many unaware of their options.
Equity Release Council figures show lending rose 4% to £597 million in Q2 2026 from £574 million in Q1, while customer numbers rose by the same margin to 13,489. Both remained below Q2 2025 levels.
