The current framework for delivering guidance and advice to those seeking to borrow money against their property as they approach and enter retirement operates largely in two distinct silos according to research published by the Council of Mortgage Lenders (CML). It is split between lenders and intermediaries who lend and provide information and advice on residential mortgages, and those who lend and provide information and advice on equity release products (mainly lifetime mortgages).
The report suggests the two markets have very different attitudes towards borrowing in later life. Residential mortgage lenders have traditionally viewed borrowing as a means to accumulate equity and a retirement free of debt. The lifetime mortgage lenders see borrowing in later life as a means to help customers extract value from the accumulated equity.
The CML highlight how advising older borrowers can be time-consuming and expensive and those needing the loan who may need to move between the two markets or may wish to weigh up the advantages and disadvantages of each market find there is no single obvious place to go and no joined up framework for addressing their needs. In addition, the report suggests consumers are maybe frustrated at barriers to borrowing, some of which can seem to them unfair. They also perceive that the products available do not fully meet their needs and that products can be difficult to compare and understand.