Event chair and director of Legal & General Mortgage Club Jeremy Duncombe asked the panel about the opportunities and challenges facing lenders in the over 50s mortgage market.
Matthew Wyles, senior adviser at Castle Trust, said lenders needed to stop treating borrowers who had reached their 55th birthday as if they had two heads. He said they must modernise their approach to this age group which no longer thinks of retiring on a set date.
“I think the prize will belong to the brave, those guys who are willing to understand exactly where the FCA are coming from and start to break some of the rules that have evolved, some of the coral reef that lenders have constructed around themselves, which offers a big opportunity there,” he said.
Wyles said borrowers in this age bracket often had more than one source of income and more complex strategies in place than simply paying back the mortgage in its entireity on their 55th or 65th birthdays.
Looking at the house as a money box and viewing the process of using housing wealth as continuum were recommended as ways in which lending to the older 50s could be improved.
Wyles said a borrowers should be able to move smoothly from a capital repayment mortgage onto an interest-only plan which allowed them to pay rent on the property. In later life an equity release option may be more appropriate. “It should be a continuum not a sudden set of jolts from one form of finance to another,” said Wyles.
Panellist Simon Chalk, technical manager at Age Partnership, praised Santander’s interest in developing a lifetime mortgage option for its customers and said he expected to see other lenders develop products to serve the over 50s market.
