There’s more customer protection, more lenders and, most of all, far more product choice for our customers.
In fact, in this most tumultuous of years, the lifetime mortgage has been booming – and we now have 439 more products than were on offer just three years ago.
Or, if your brain works a little more laterally than mine, this year the market has produced a new lifetime mortgage product every 28 hours.
However, despite this explosion in customer choice and options, there’s often one thing that customers focus on more than anything else – and that is simply the interest rate.
It will always matter.
Ultimately, we could be firing out new products at ten a second, but if the rates seem too high to our clients, we’ve got a problem.
Plus, if like most of our customers you only ever read how equity release is an ‘expensive last resort’ in your Sunday paper, then you might not realise what’s been happening with lifetime mortgage rates. They’re coming further and further down.
In truth, interest rates have been steadily decreasing throughout the product range for years now, and this should be celebrated.
According to the Equity Release Council’s (ERC) most recent market report, average interest rates fell to a record low of 4.48 per cent in the second half of 2019.
This continues the trend as back in 2016 where average interest rates hovered around six per cent, before falling to 5.2 per cent in July 2018 and so on.
What’s more, according to the ERC’s market review, two in every five equity release products offered a sub-four per cent interest rate. This downward trend should pull adviser smiles upwards.
Challenging negative opinions
Of course, regardless of this positive pattern, it seems that the naysayers will continue their scepticism against equity release.
We will continue to have unfair comparisons and the multitude of safeguards, flexible products and array of choices will likely go ignored in the mainstream media because for many it’s too much trouble to do a deep dive into how equity release really works.
For this reason, it’s important for the industry to be really clear, transparent and demonstrate the pros and the cons of the products so customers can make informed decisions.
Fundamentally, for advisers and lenders alike, lower interest rates should and often are just one part of the complete equity release offering, but the simple fact is that it matters to our customers.
Simplicity and brass tacks will always be important, but we need to shout out about this steady improvement.
I feel that sometimes these incremental changes in our industry are glossed over in the mainstream press, and we need to make more of these small wins.
The later life lending market is evolving and will continue to do so and, as a united industry, we need to be crystal clear about customer choices while maintaining safeguards and enabling a clear understanding of what’s involved from the outset to the long term.
We can make equity release the success story of this totally crazy year. We just need to shout longer, louder and harder.