The latest Mortgage Market Review has prompted renewed interest in niche areas, including mortgages in retirement, which will have an impact on equity release.
Confirmation of the need for compulsory advice follows what Safe Home Income Plans introduced some years ago which has been an important factor in maintaining standards.
The detail around income in retirement and the servicing of interest is something which will perhaps provoke more debate in the months ahead.
The number of products that allow for interest servicing are limited at present, but these will become more popular as baby boomers head for retirement.
Like it or not, many lenders have an interest-only mortgage portfolio which will not be repaid at retirement. A lifetime mortgage will then be an option for clients wanting to reduce outgoings. The industry will be forced to innovate – with income verification at the centre not only of advice, but also of lenders’ responsibility.
All these factors will contribute to the growing importance of mortgages in retirement and, by default, a whole new way of looking at loans for the elderly.