Interest-only cause problems for cash-strapped retirees, reveals ERC
Homeowners with an interest-only mortgage could have a “huge problem” in the next five years, an online poll by the Equity Release Council (ERC) has revealed.
30 per cent of visitors to the site believed interest-only mortgages were a real concern for older homeowners while a further a 20 per cent considered it a growing problem. Only 7 per cent didn’t think there was an issue.
When asked for a solution to the interest-only time bomb, 44 per cent favoured using equity release while 28 per cent thought downsizing offered a way out. With equity release emerging as the most popular option, this suggests there is now a growing understanding of this product and how it could be used as a viable funding tool in retirement.
Andrea Rozario is the Director General of the Equity Release Council:
“While this is okay for some with sufficient income, most don’t want to worry about this in their later years.
“Whether someone fearing this issue is approaching retirement or has in fact already retired – it is also wise to explore their options and speak to an adviser, so that they can decide what the best option for their situation is. Equity release, downsizing or speaking to family members are all options which can be explored.”
Content correct at time of publication