Some 74% of advisers want more flexibility from lenders as increasing numbers of older clients face capital repayment issues and believe lenders need to relax lending criteria.
Mortgage advisers are urging lenders to be more flexible to help older borrowers facing interest-only mortgage repayment deadlines, research from equity release referral service Key Partnerships shows.
Some 74% of advisers want more flexibility from lenders as increasing numbers of older clients face capital repayment issues and believe lenders need to relax lending criteria.
Will Hale, chief executive of Key Retirement said: “We are seeing significant numbers of customers of equity release customers who need to pay off interest-only loans and are using their property wealth to ensure they can stay in their home.
“Mortgage advisers clearly are seeing the same high numbers of inquiries and are becoming frustrated when dealing with some lenders on finding solutions for customers.
“Not all lenders are failing to address the issue with some such as Co-Op Bank and Santander agreeing partnerships with equity release lenders but more needs to be done to offer a range of options to older homeowners.”
Around 77% said traditional lenders need to develop products specifically for customers with interest-only deadlines and 79% thought traditional lenders have been slow to address the problem.
More than half (52%) of mortgage advisers regularly recommend equity release as a solution for older customers. But 56% are concerned their advice on equity release is potentially risky as they do not fully understand the market.
Key estimates around 10,000 customers a year are coming to the end of their interest-only mortgage term with no means to repay their loan.
UK Financedata showsthatmore than 300,000 borrowers have interest-only loans worth more than 75% of their homes
Currently the Financial Conduct Authority is consulting on allowing retirement interest-only mortgages in response to the growing problem.
