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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.”


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