Advisers urge lenders to relax rules for interest-only borrowers

74% of advisers want lenders to relax lending criteria as increasing numbers of older clients face capital repayment issues.

77% say traditional lenders need to develop products specifically for customers with interest-only deadlines and 79% believe traditional lenders have been slow to address the problem.
 
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 CML data shows more than 300,000 borrowers have interest-only loans worth more than 75% of their homes

The FCA is currently 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.”