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Santander looks at equity release launch

by: Samantha Partington
  • 30/10/2014
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Santander looks at equity release launch
Santander is considering launching an equity release mortgage product for its older customers next year, the bank has confirmed.

In a statement, a spokesperson said: “As a responsible lender it is right we consider all options for allowing customers to stay in their homes and we are doing this. Offering a lifetime mortgage is one option we are considering for 2015.”

Speaking to The Telegraph, Steve Pateman, head of UK Banking at Santander, said there were a lot of 65 to 70-year olds who didn’t have a lump sum to repay their interest-only mortgage and didn’t want to move house.

“In our view, extending their mortgage term for a few years is just kicking the can down the road so we’d rather work with customers offering a range of solutions of which one could be a lifetime mortgage.

“As long as customers go in with their eyes open, we don’t expect complaints from family that there is ‘no money left’ for an inheritance,” said Pateman.

Traditionally a lifetime mortgage, which is a an equity release product, allows homeowners to defer making any monthly interest or capital payments. The borrower is allowed to roll-up the payments onto the outstanding balance which is repaid on the death of the homeowners.

The Santander spokesman confirmed that should the bank launch a lifetime product it would require customers to pay the interest monthly, subject to affordability.

Alice Watson, product and communications manager for equity release provider Stonehaven, said Santander’s announcement was great news for the sector.

“It’s great for the bank’s customers and it’s beneficial for the secondary market in helping it to grow.”

Watson said she would still want borrowers to receive advice from a qualified equity release specialist to make sure they understood the implications of their product choice.

 

 

 

 

 

 

interest and capital repayment of the loan by rolling up the monthly interest payments allowing the borrowers to repay the debt by the sale of the property after death.

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