Brokers are seeing an influx of business from older borrowers, anecdotal evidence suggests.
David Hollingworth, associate director of communications for L&C Mortgages, said that L&C has been talking to more older customers, while Martin Sims, a consultant previously at HLPartnership, said brokers have turned to this later life lending area to make up for a lack of business elsewhere.
Sims said: “There’s more interest from brokers who previously had a wealth of buy-to-let business and have filled that gap with remortgages and later life lending. They are areas that need serving.”
Hollingworth predicted there may be a focus on remortgages because lenders want to get more business done before the end of the year and he said remortgages offer the best chance of that.
He said: “Retirement interest-only will remain an area of interest. More lenders are offering products to older borrowers and RIOs will start to pick up pace.
“There will probably be more remortgages. With some of the best rates there’s an element of lenders wanting a share of that business.
“Some lenders will suddenly look at where they sit between targets and if they can get that before the year end that’ll be the ideal way to do that.
“It’s also good for borrowers because instead of rates going up, some fixed rates are getting more competitive.”
He added that there are advantages of product transfers such as speed but if lenders aren’t competitive enough with retention rates, they’ll push customers away.
Martin Sims agreed that there’s more choice with later life lending.
He said: “We currently have a convergence of remortgage product switches and later life lending almost forming a new space.
“It’s been led by the Bank of Mum and Dad whom some are on interest-only, some funding university for children and some deposits for them. It’s a massive area for growth, demonstrated by attention lenders have given to it.
“A large proportion of doing people doing product transfers and remortgages are 50 plus and having to make financial decisions of how their family is with equity and property, thinking about passing that money down.”
Sims has seen more people make decisions for themselves as well as redistributing some equity for their family.
He added: “Once you’ve helped your children with education and getting on the prop ladder, you have to help yourselves and traditional mortgage may not be able to help. That’s where the focus is for a lot of lenders. People understand there’s more choice.”
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