This week’s letter comes from Peter Yates, managing director at Premiership Mortgage Team, in response to the article: Exclusive – Legal and General to launch RIO and encourage mainstream broker interest.
Yates said the expansion of retirement interest-only is “a big market opportunity” but suggested the deals on offer could be improved.
He said: “The new products appearing so far are income based with monthly payments. Most people interested in this [product] will be property rich and income poor which is why they wish to release equity and won’t fit this criteria.
“What about a product which advances up to 40% of the value, interest roll up and the flexibility of capital draw-down?
“This would enable the benefit of lower rates than the current equity release average of 5.5% and be a far more attractive product to those with small incomes not wishing to pay three times the rate of the average re-mortgage.
“Come on lenders.”