‘Enhanced’ lifetime mortgage provider more 2 life is revamping its approach to underwriting its product ahead of an anticipated surge in sales over the coming months.
The specialist equity release lender has been using a short ‘Yes/No’ question set designed to quickly ascertain a client’s eligibility for a possible enhancement to their Loan to Value (LTV). The new approach will see the lender offer a tailored quotation, using the same non-invasive health questionnaire, that will lead to an improvement in rates for those in the older age brackets (75+), it claims.
Dave Harris, more 2 life’s managing director, said: “The market for enhanced equity release is evolving quickly and as a leader in this area we want to capitalise on the opportunities this presents to us and our customers. Our new underwriting approach will mean we can offer a more bespoke service to brokers and their clients, with a focus on an older age profile where we will offer very competitive interest rates and cash back deals.
“The Budget announcements earlier this year and proposed changes to pension legislation will, in our opinion, open up new market opportunities for brokers as equity release increasingly becomes part of a more holistic approach to retirement planning. Beyond the borders of equity release, we see huge potential in the growth of the ‘Retirement Lending’ market, as retirees increasingly look at other lending solutions – buy-to-let and secured lending, for example – as a way of complementing their retirement financial plan.”
Harris pointed out that enhanced equity release is following a similar trajectory to enhanced lifetime annuities, which evolved from a niche product solution in the 1990s to become a mainstream option today.
“As many as 60% of people reaching retirement age and buying annuities today could qualify for an enhancement based on their medical history and lifestyle and as clients reach their 70s and 80s health issues become more prevalent.
“Currently, only about 10% of the equity release market is enhanced so this demonstrates the room for growth in this area and we intend to build on our strength and expertise to help grow the market further.”