Only 20% of people believe the current range of mortgage products provide enough choice and differentiation to meet customer needs, according to new research from housing investment and equity loan provider, Castle Trust.
Its study, which conducted before the government launched its ‘Help to Buy’ equity loan programme, found around 80% of mortgage holders would like to see their lender introducing more creative solutions to mortgage finance.
66% of people think the mortgage products on offer, while plentiful, lack variation and 79% of people would like to see increased innovation.
Castle Trust supports the Home to Buy initiative, which mirrors private sector equity loans including Partnership Mortgages which provide a 20% equity loan for those looking to buy an existing home.
Sean Oldfield (pictured), chief executive officer, Castle Trust said: “There is strong demand and interest from borrowers in more creative solutions to housing market issues including the need for large deposits and the potential risks of homeownership.”
Around 37% of homeowners would welcome the opportunity to reduce their monthly mortgage commitments through equity loans, the research shows. A further 53% of mortgage holders also say they would consider it ‘uncompetitive behaviour’ if traditional lenders chose not to offer equity loans alongside their existing mortgages.
Oldfield added: “The combination of demand from consumers and the introduction of Help to Buy has thrown the spotlight on equity loans. The need for creativity and innovation in the UK mortgage market is a real and growing issue, and both the Government and borrowers have made clear that they welcome equity loans as one solution.”