Here are the top customer misconceptions about Equity Release
There are still some pervasive equity release myths that prevent many people considering releasing equity from their homes to widen their options in later life.
In the first quarter of 2021 16,527 customers released £1.14 billion from their homes, up 7% compared to Q1 2020. More and more people are looking to release equity from their homes*. As an industry we have a duty to inform customers about how equity release has changed, and the protections that are in place to make it safe and offer your customers flexibility and peace of mind when releasing equity from their home.
What misconceptions do your customers have about how lifetime mortgages work today?
“I can’t pay it off”
Many worry that a lifetime mortgage will increase rapidly as interest is rolled up. While many people value the opportunity to release equity without having to make payments, those who want to make payments to manage the size of the loan have options to do so.
For example, OneFamily Lifetime Mortgages offer Interest Payment or Interest Roll-up with Voluntary Payment options, so your customers can manage the size of their loan by paying off the interest each month or up to 10% of the original loan amount each year.
“I could end up losing my home or owing more than it is worth”
Lifetime mortgages that meet Equity Release Council standards have a No Negative Equity Guarantee that ensures borrowers will never owe more than their home is worth, and that they have the right to remain in it for life.
“Once I release equity I can’t move house”
A common misconception is that once customers release equity from their home, they cannot move the lifetime mortgage to a different property or downsize and pay it off.
If your customer needs to move house, they can do so. They can transfer their lifetime mortgage to a new property, provided the new property meets the lender’s criteria.
All Equity Release Council-accredited lifetime mortgages also come with downsizing protection. With a OneFamily Lifetime Mortgage, if your customer wants to move to a smaller property after 5 years, they can clear the outstanding debt before the end of the loan term without incurring an Early Repayment Charge (ERC).
Safer equity release for all
As the lifetime mortgage market continues to grow, so will the variety of homeowners and their needs. We play a vital role in helping them understand their retirement funding options.
OneFamily Lifetime Mortgages are customer-focused, flexible and suit a broad range of retirement borrowing needs. We assess each case individually and offer direct access to our Underwriters. We’ve been empowering modern families throughout their financial lives for over forty years.
