Nearly four in five (78%) homeowners aged between 50 and 80 have said they are feeling the effects of the cost of living crisis, research by LiveMore has found.
The later life mortgage lender also found that of this number, 19% said they are significantly impacted and do not know how they are going to cope.
However, LiveMore has said that one of the options for brokers with clients in this situation is an interest-only mortgage, for the purpose of debt consolidation, with the lender calling on the industry to revisit the product.
The Government recently introduced the mortgage charter, which is designed to assist borrowers who are struggling financially, with one of the solutions for those with a repayments mortgage is to move to interest-only.
LiveMore has said the interest-only option may also be suitable for people who own their home outright and don’t want to go down the equity release route.
The lender recently published a white paper, Is consolidating debt with an interest only mortgage a good idea?, which discussed this in more detail, focusing on older clients between the ages of 50 and 90 plus.
Chief executive officer and founder of LiveMore, Leon Diamond, said: “Interest-only loans had bad press in the past but today they are very different, much more straightforward and highly regulated. They are also flexible so the borrower could switch later to all or part repayment and can make overpayments of up to 10% a year.
“As part of Consumer Duty, lenders and brokers must ensure they understand individual circumstances before granting interest-only for debt consolidation. Has the client gone through professional debt counselling and considered other solutions, for example?
“We need to understand how the debt occurred in the first place, make sure the borrower is not living beyond their means and can afford to make monthly repayments for the term of the mortgage.
“My message to intermediaries is don’t dismiss interest-only as a debt consolidation solution. The rates are cheaper than credit cards and personal loans and it may well be the best solution for some clients.”
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