Adrian Coles was responding to the Financial Conduct Authority’s report last week, in which it suggested lenders continually extending borrowers mortgages should consider whether they constituted a lifetime mortgage.
Coles told Mortgage Solutions extending an interest-only mortgage where the borrower had experienced a drop in income because of retirement could be difficult: “We need to find ways of getting equity out of older peoples’ houses in order to help them. Extending the mortgage is not the same because you are not taking out any additional loan to release equity.
“But if there was a lower LTV loan would there be a question of adding to that loan with equity release and I am sure some lenders would look at that on a case by case basis. But they have got to be certain they can counter any accusations of mis-selling.”
Many building societies were already in contact with customers about repayment plans, he added.
However, he stressed it was the borrower’s responsibility to come up with a suitable repayment plan: “As Martin Wheatley said, this is not a complex product people couldn’t understand. Interest-only means interest-only.”
