Equity release is experiencing a “breakthrough year” as it moves to the mainstream according to Equity Release Council chairman Nigel Waterson.
As announced today Legal & General and Santander have signed a 5-year deal which will see L&G offer lifetime mortgages to Santander customers.
Waterson said: “2016 is shaping up to be a breakthrough year for the equity release sector. It is 25 years since providers originally collaborated to establish a safe and reliable market for consumers.
“As today’s announcement shows, we are now seeing new partnerships and relationships emerge which will help put more people in a position to make use of what is often their biggest potential source of wealth in later life: their home.
“Appetite from high street lenders to offer lifetime mortgages to their customers shows these products have a crucial role to play in mainstream financial planning for retirement.”
Alice Watson, product and communications manager at Retirement Advantage Equity Release, reckoned the move marks the equity release industry’s “move into the mainstream”.
And Will Hale, business development director, Key Retirement, expected other lenders will “look to similar solutions”.
Santander’s arrangement has the potential to help existing Santander mortgage customers that are reaching the end of their mortgage term who may have a shortfall in repaying the capital on their interest only mortgage.
Watson said: “Equity release has come a long way in recent years, and the fact that major lenders such as Santander are embracing it is a sign of its move into the mainstream.
“The hope is that this will bring equity release products to the attention of even more potential customers; people who will be attracted by flexibility across the product range and the ability to use it to help loved ones financially, pay off existing debts or just help towards the lives they want to live in retirement.
“These are exciting times for equity release and this news is evidence of a bright future to come.”
Hale said: “We are delighted to be providing advice through this arrangement with Legal & General to Santander customers.
“This is seen as not just a significant step for the three businesses but very important move for the bank’s customers.
“This step ensures that the widest range of options from traditional mortgage solutions through to lifetime mortgages are being considered to help interest-only borrowers.
“It is also reflective of the desire to ensure that wider reaching solutions are being accessed to help borrowers for whom traditional solutions simply do not work.
“We expect other lenders to look to similar solutions as we enter the first major wave of interest only maturities.”