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Flexible loan could be turned into equity release

Equity-release lenders are looking at a new form of product that develops from a flexible mortgage to become a lifetime mortgage, according to Prudential national mortgage club manager John Malone.

He says the equity-release market is moving towards a new product built around a flexible mortgage. He says the product will enable a 60year-old borrower who is having problems paying off a flexible mortgage to amortise the debt and take out an equity-release mortgage with the same lender.

Malone says that even now if a client in this situation approached some lenders they would be able to offer him a similar solution.

He says: “I think this is the way forward for equity-release products. A consumer who is over 60 and having trouble paying the interest on a flexible mortgage could, instead of moving the debt, amortise it by transferring to an equity-release mortgage with the same lender. Lenders do seem to be looking at developing products along these lines -it is a natural progression.”

Britannic Retirement Solutions head of corporate communications Jim Boyd says: “The equity-release market is screaming out for innovation and attempts to innovate should be wholly applauded, so long as they meet the consumer&#39s needs. This sounds very interesting and certainly is not something that we would discount.”

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