Dean Mirfin, business development director at Key Retirement Solutions, said lenders are currently fighting over the lowest market rate. An increasing number of lenders entering the sector are helping to push the rates lower which works in the favour of the customer and the adviser.
The outlook follows the scathing attack by the FSA on brokers and their perceived incompetence in advising on lifetime mortgages. It also coincides with recent announcements that the Prudential is developing its own lifetime mortgage product set to be launched in the autumn and BM Solutions’ likely entrance into the market later in the year.
Mirfin said: “The battle seems well and truly on to provide the lowest rate for lifetime mortgages. The current lowest rate out there is 6.19 per cent with Northern Rock but Portman Building Society has also released some good deals recently.”
“The rates are around 20 per cent lower than they were five years ago. The difference in interest rates within the sector is massive so it’s important that customers are made fully aware that the actual cost to the client depends not only on the interest rate but also how that interest is applied and any fees the provider charges,” Mirfin added.
Ron Stout, assistant director of PR at Northern Rock, said: “It is an increasingly competitive market and there will be greater scope for the customer and the adviser with new players entering the sector. We intend to remain a market-leading force.”
Ali Crossley, director of lifetime mortgages at Prudential, stressed the opportunities available for brokers. She said: “Almost a quarter of financial advisers who don’t currently sell lifetime mortgages are planning to start next year.”
