Home improvements are still the top reason for equity release, says Canada Life – Mortgage Strategy

Home improvements remain the top reason homeowners take out a lifetime mortgage, new data from Canada Life shows.

However, the figures also show that a growing number of customers are using equity release to improve their financial resilience by paying off existing mortgages and consolidating debt.

Canada Life’s analysis of customer motivations in the first half of 2026 found that 43% of applicants cited home modifications and improvements as the top reason for releasing equity. This makes it the most common use of lifetime mortgages.

The share of customers using home equity to pay off an existing mortgage has also increased. In the first half of 2026, 30% of applicants gave this as the main reason, compared to 27% for the whole of 2025.

The trend strengthened over the year, rising from 27% in the first quarter to 32% in the second.

Yet mortgage repayments remain below levels five years ago, when 46% of customers used equity release to pay off an existing mortgage.

Family donations remain a key driver for releasing equity, although demand has declined from last year’s peak.

In the first half of 2026, 15% of filers said they were freeing up equity to give money to family members, up from 19% in 2025.

Despite the decline, donations remain more common than in previous years: they represent 11% of applications in 2022 and 10% in 2023.

Customers are also increasingly less likely to use equity releases for discretionary spending.

The share of freeing up equity to pay for vacations fell to 21% in the first half of 2026, compared to 26% in 2025. Other non-essential uses, including buying cars and buying additional real estate, also fell over the same period.

The findings suggest that more and more homeowners are prioritizing essential financial needs over lifestyle spending as cost-of-living pressures and economic uncertainty continue.

Sadna Zaman, home finance proposition manager at Canada Life, said: “Home modifications and improvements remain the most popular reason for releasing equity, with customers using lifetime mortgages to finance changes that will allow them to continue living in their own home and improve their quality of life in retirement.

“The data also shows that demand for discretionary spending on things like holidays has declined in the first half of this year due to ongoing cost-of-living pressures and market uncertainty. Instead, customers have increasingly looked to build financial resilience by consolidating debt, building an emergency fund or paying off an existing mortgage.

“The wide variety of reasons underlines the flexibility of equity release as a solution, and the importance of careful, tailored advice. With comfort, financial security and intergenerational planning all competing, advisors play a critical role in helping clients balance these different priorities and show how real estate wealth can fit into a broader retirement strategy.”

Top reasons for equity release