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Equity release product choice almost double from last year

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  • 21/11/2019
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Equity release product choice almost double from last year
Older households cashing in on the equity in their homes have almost double the number of lifetime mortgage deals to choose from as they did last year.

Market data released by Key Partnerships, Key’s equity release referral service, showed there were 314 lifetime mortgage products on the market in October, compared to 161 at the end of last year.

Equity release plans that allow families to pay the interest on the loan instead of rolling it up have increased from 10 at the start of the year to 81.

Borrowers who live in sheltered or age-restricted properties also have more choice.

Lenders serving this market have increased the number of deals available to these homeowners by 241 per cent from 48 at the end of last year to 164. Meanwhile products offering downsizing protection have more than doubled from 87 to 187.

The increase in the number of lifetime mortgages that offer customers fixed early repayment charges that mirror the structure of exit fees on a traditional mortgage have risen more slowly.

There are now 140 deals with fixed exit fees on the market compared to 97 at the end of 2018.

The alternative method of early repayment charging which is linked to gilt rates and can fluctuate depending on whether gilt rates go up or down is still the dominate type of exit fee. Some 174 deals come with gilt-linked early repayment charges.

Jason Ruse, head of Key Partnerships, said: “While lending in 2019 has been subdued, product innovation has not and advisers now have almost double the number of products to choose from and the widest range of features ever seen in the market.

“Guided by their advisers, consumers can now choose the product which ideally fits their circumstances – choosing to repay interest, make one off capital payments or protect their family’s inheritance as they see fit.”

 

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