"The mortgage industry will be more responsible for ensuring borrowers know all their options and can select the best option for their needs."
People aged 50-90+ have worked hard for decades and are pretty used to making informed financial choices. But you can’t truly make the right choices if you’re not aware of all your options.
That’s why 2023 is so exciting - it’s the year of consumer choice.
When the FCA's Consumer Duty Rules become legally binding in July, the mortgage industry will be more responsible for ensuring borrowers know all their options and can select the best option for their needs.
As a 50-90+ lender, we think it’s about time. We understand the frustration for this demographic when lenders fail to recognise them because they have several income streams, want to work into their 70s, or lots of other factors that stop the majority of lenders from helping them. Only 4% of people we surveyed over the age of 50 thought they could get a mortgage – and just 2% in their 80s – but their days of being underserved are numbered.
In the spirit of greater choice, this year we’re adding equity release to our broad range of mortgages. We also just introduced our first ever two-year fixed rate to add to our five, 10-year and fixed for life options, giving us the widest range of fixed rates in the 50-90+ space.
This means we can offer a full suite of mortgage options to allow our customers to choose the best solution to their short-term concerns, long-term dreams, or both.
The cost-of-living crisis continues to bite
In the year to October 2022, the price of consumer goods and services rose at the fastest rate in four decades, while inflation reached 10.4% in February 2023.
Around half of people asked by the Office for National Statistics were buying less food, while around 15% worry about running out. In our own survey, nearly half of people aged 50-90+ expect to be impacted ‘a lot’ financially this year.
Meanwhile, having been at a record low of 0.1% less than 18 months ago, the Bank of England Base Rate now sits at 4.25% as of March 2023. This may rise even further as BoE Governor Andrew Bailey said interest rates are key to controlling inflation.
It’s a lot to process for households trying to manage rising living costs, pay bills and make it through in the short term while not losing sight of the long-term plans they’ve been making for decades.
Giving borrowers the ability to respond
We understand why someone might have reservations about tying themselves to a long-term financial product. Some will value flexibility to navigate life right now, with all its surprises, its rising prices and its uncertainty.
That’s why we added a two-year fix option – our customers need and deserve choice.
They can now have short-term certainty and refinance after two years without facing early repayment charges. However, they may be looking further ahead and see longer-term certainty as more ideal at a time when interest rates are still historically low.
When someone chooses a lender, they should feel confident about getting a solution that improves their life.
That’s what Consumer Duty is all about, and we’re all for it.
