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Around 85 per cent of online equity release calculator data misleading

  • 10/08/2023
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Around 85 per cent of online equity release calculator data misleading
More than 85 per cent of data from online equity release calculators could be considered misleading to consumers, research has found.

The research from Equity Release Supermarket (ERS) was conducted on the same day and compared against Iress with three scenarios with varying age, property value, and loan to value (LTV).

The research reviewed 48 calculations across several websites, and found that almost a quarter of calculators gave lower loan to values (LTV) and loan amounts than Iress and ERS.

Around 63 per cent of the calculators provided higher LTVs and maximum loan amounts than Iress and ERS.

The research added that the products do not exist, and consumers would not be able to proceed further.

It continued that with Consumer Duty these calculator inaccuracies would fail to meet those regulatory standards.

The report added that some of the calculators showed that customers could borrow more than the maximum loan available within the equity release market.

As an example, an 85-year-old with a £300,000 property, was given a loan amount of £192,000, representing a 64 per cent loan to value (LTV), when the largest loan available at the time of the study was a 50 per cent LTV or £150,000.

The research found that 13 in 16 sites reported higher maximum loan sizes for consumers aged 70 plus than would be available.

Mark Gregory, founder and CEO at ERS, said: “This study was conducted in light of the new Consumer Duty regulations launched this month. Our aim is always to support consumers by providing real-time, accurate data, and to help the wider industry through the provision of smartER technology.

“We appreciate that it’s a challenging time for the industry, however it’s important we collectively drive the best possible consumer standards and we’re here to support any equity release firm in achieving that.”

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