We may have had several good years on the trot, but the reality is that we are still tiny compared to the mainstream mortgage market
Those of us who have specialised in the sector for some time know the lifetime mortgage can be an invaluable tool for delivering the retirement thousands of homeowners desire and deserve. And yet, our reputation within the general public isn’t hitting the heights it could and perhaps should be.
Recently, I spotted that equity release had been given the once over by a well-known and well-respected newspaper’s online edition.
I was pleased, if a little shocked, to see that the analysis was even-handed and loaded with clear information. But having dared to venture into the online comments section (something nobody should ever do sober) my positivity was soon dampened.
It seems that despite the mainstream press now considering a shift toward a more balanced review of equity release, the general public still think lifetime mortgages are just an expensive last resort, as one online commentator put it.
The persistence of this belief is surely the biggest challenge we face in equity release today, and it is one that we will struggle to defeat without any help. But the tide may be turning.
The main challenge we face is to explain the differences between equity release and standard mortgage products, and why direct comparisons tend to be unhelpful. For example, when comparing the interest rates of a standard mortgage with a lifetime mortgage in isolation, equity release does indeed seem expensive.
However, this comparison does not factor in that lifetime mortgages do not demand instant regular repayments like traditional mortgages, or the fact that they are open to older customers only, or the plethora of essential safeguards like the no negative equity guarantee.
Ultimately, comparing equity release and traditional mortgage products directly, without these caveats plainly outlined, is like comparing apples and oranges.
The success of equity release in the past few years is essentially moot while the general public continue to hold this view.
However, with the announcement that the Pension Advice Allowance will point retirees toward discussions on housing wealth and lifetime mortgages, and the possible shift within the mainstream press, perhaps we can finally present the public with the facts and fair comparison they need to help them make an informed decision.