A fifth of homeowners turn to lifetime mortgage

June 18, 2017 by Brendan O'Neill

Home owners

According to research by Bower retirement, almost one in five homeowners who had tried to downsize had turned instead to a lifetime mortgage of downsizing.

The specialist advisors at Bowers had estimated that about 17% of clients had considered downsizing before turning to equity release in order to raise money. More than half of the advisors said that clients had changed their mind about downsizing due to the cost of moving home, while 43% of advisors blamed the change of heart on not being able to find a suitable property.

About half the advisors said that not moving away from friends and family was an important consideration for some homeowners. The slowdown of the property market is also a factor in the number of clients turning to lifetime mortgages rather than moving home, as homes are valued at less than expected by 17% of clients.

The chief corporate officer at Bower Retirement, Andrea Rozario, said that downsizing was a practical and logical solution for some over 55s, but only if they find a house which suits them at the right price.

Rozario added that moving home incurs costs, like the new stamp duty rates, which may make the decision to downsize uneconomical. In addition to the financial implications of downsizing, there are also emotional issues for some, making a lifetime mortgage a good idea. Speaking to a CeMAP qualified mortgage advisor may help making the decision easier as they can assist in weighing up the financial implications.