From the financial advisors surveyed regarding the chosen repayment options of their interest only mortgage clients, over 30% of their clients had chosen to release equity from their homes to pay off the capital. This was closely followed by downsizing to a smaller property.
Other options considered as a means of paying off capital, were using a lump sum of cash from a pension pot and re-mortgaging using a standard residential mortgage.
Adam Carnall, head of partnerships at Age Partnership said: “Equity release remains one of the most popular options for those people with interest only mortgages who have no other way of repaying their debt. We see this trend both from the introducer market and our direct clients. We always ensure that clients have considered all of the options available to them, but for some releasing equity remains the most suitable solution.
Financial advisors are crucial in solving the interest only crisis, as they are out there every day speaking to the people that are most in need of advice. It can feel quite daunting for many of these clients so being presented with a range of options can help them feel like they have more control.”