| Myth |
Truth |
 |
Interest always rolls up, eroding the children’s inheritance, leaving nothing |
 |
Options exist to repay interest and/or capital to protect the balance and future inheritance |
|
Equity release products are inflexible and once taken, clients are tied to forever |
|
Plans can be transferred, accept additional borrowing or even repaid over a fixed term |
|
Interest rates and set up costs make it an expensive option over the long term |
|
Lender competition has resulted interest rates now at their lowest with special offers such as free valuations and cashbacks |
|
Equity release is not diverse enough to meet the spectrum of retiree requirements |
|
Whether it's drawdown, interest only or enhanced, plans are now more versatile and encompassing retirees changing needs |
|
It doesn’t provide mortgage solutions to meet the baby boomer generation |
|
Where lenders are calling in their mortgage books, equity release provides a safe haven to switch to a lifetime mortgage |
|
There are restrictions on age and the maximum amount that can be borrowed |
|
Plans sensibly start at age 55 and lenders will even release up to 50% at this age |
|
The industry doesn’t have strict enough regulation, with adverse news stories |
|
The FCA now regulates equity release and brokers abide by an ERC code of conduct to strictly protect the consumer |
|
Once equity has been released clients are unable to move home |
|
Equity release plans are portable and even allowed on retirement developments |
|
It is difficult to repay the loan and heavy penalties exist on repayment |
|
All loans are redeemable; however they are designed to run for a lifetime. New early repayment options exist with no ERCs |
|
There are few recognised brand named lenders, so how can we trust the industry? |
|
Brands such as Aviva & LV= are already present. L&G have now entered the equity release market. Confidence is being built |
