According to the study, 74% of advisers want more flexibility from lenders as increasing numbers of older clients face capital repayment issues and believe lenders need to relax lending criteria.
They warn that lenders are failing to offer new solutions – around 77% say traditional lenders need to develop products specifically for customers with interest-only deadlines and 79% say traditional lenders have been slow to address the problem.
More than half (52%) of mortgage advisers say they regularly recommend equity release as a solution for older customers but 56% are concerned their advice on equity release is potentially risky as they do not fully understand the market.
Key estimates around 10,000 customers a year are coming to the end of their interest-only mortgage term with no means to repay their loan and Council of Mortgage Lender data shows more than 300,000 borrowers have interest-only loans worth more than 75% of their homes
Currently the Financial Conduct Authority is consulting on allowing retirement interest-only mortgages in response to the growing problem.
Will Hale, CEO of Key Retirement said: “We are seeing significant numbers of customers of equity release customers who need to pay off interest-only loans and are using their property wealth to ensure they can stay in their home.
Mortgage advisers clearly are seeing the same high numbers of inquiries and are becoming frustrated when dealing with some lenders on finding solutions for customers.
Not all lenders are failing to address the issue with some such as Co-Op Bank and Santander agreeing partnerships with equity release lenders but more needs to be done to offer a range of options to older homeowners.”
