View more on these topics

Boulger forecasts lifetime loan remortgaging

Remortgaging in the lifetime mortgage market will become as prevalent as in the residential market, says John Charcol senior technical manager Ray Boulger.

Speaking at a GE Life round table in London, Boulger said flexible features will grow as more providers compete and spur interest in remortgaging which he expects will become evident within the next year.

A lifetime mortgage has generally been seen as a product acquired for the rest of the property owner’s life.

Existing products carry punitive early redemption charges, meaning that the remortgage market is currently negligible, but newer products will become more flex- ible, said Boulger.

GE Life senior product manager Simon Little warned that advisers now ignoring early redemption charges do so at their peril if the remortgage market takes off.

Little said the idea of a combination of lifetime with long-term care hitting the market in the next two to three years should not be ruled out. The LTC market has almost disappeared from protection providers’ agendas but could be resurrected if it is made a feature of an equity-release product but he was less certain whether a lifetime and reversion hybrid is on the cards, as suggested by Boulger.

Boulger said: “People will be remortgaging for different features to maximise the amount of flexibility for the purchaser. We will see people’s requirements change and, as a result, the remortgage mar- ket will flourish.”

Little said: “Any market is driven by creativity and flexibility and this is certainly the case with equity release which we expect to triple over the next five years.”

Recommended

Don’t stumble into any pension transfer traps

Whenever there is extensive pension transfer activity, the “c” word will inevitably be mentioned sooner or later and debate can quickly become emotive and personalised. But it is helpful to have informed discussion about which transfers are appropriate and which could be construed as churning.

Mortgage View: Playing from the base line

Many lenders have yet to respond to this month’s base-rate cut. For most, the delays are attributed to Halifax wrong footing the market. The last two interest-rate cycles have seen lenders widening their margins by failing to pass on the full effect of base-rate decreases, yet they pass on the full impact of any increase. Many in the industry expected this cycle to be repeated.

It’s just not cricket, Fidelity

The fund manager merry-go-round just never stops. We are told that one in 10 funds are affected by a fund manager move every year. There have been 120 changes already this year.

Towry recovers to 1.6m profit

Towry Law sees 1.6m profit in the first half of 2005, following a 0.1m loss in the same period last year. Turnover increased for the period, despiteTowry losing 25 per cent of advisers writing business. It now has 175 registered individuals.A Henderson spokesman says: We anticipate Towry Law UK will remain profitable in second half […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment