Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.
Mainstream and later life lending 'must come closer together', industry figures say
The divide between mainstream and later life lending came under scrutiny at a panel discussion hosted by later life lender LiveMore. Stephanie Charman, chief executive of the Association of Mortgage Intermediaries (AMI), described a "cavern" between the two sectors and warned that borrowers are missing out on more holistic advice as a result.
"We need to bring the two markets closer together," she said.
Is 'later life lending' still fit for purpose?
The discussion centred on how changing demographics, longer working lives and affordability pressures are reshaping borrowing patterns, leading some panellists to question whether the term 'later life lending' remains fit for purpose.
Leon Diamond, chief executive of LiveMore, argued the label no longer reflects the reality of modern borrowing. "Get rid of the acronyms," he said, referring to products such as retirement interest-only (RIO) mortgages, term interest-only (TIO) mortgages and equity release, arguing the terminology can make later life lending harder for borrowers to understand.
Diamond questioned why borrowing beyond the age of 50 or 55 should automatically be viewed as a specialist category when people are living and working for longer than previous generations. He suggested lenders and advisers should focus on borrowers' life stages and circumstances rather than their age.
Several advisers echoed the sentiment, proposing that consumers no longer view their 50s as 'old' and that the terminology itself can create barriers by making people feel excluded from mainstream mortgage options.
Borrowing into retirement
The panel highlighted how longer mortgage terms have become increasingly common, driven largely by affordability pressures. First-time buyers are entering the market later in life, more borrowers are opting for 35-year mortgage terms, and homemovers are increasingly extending borrowing into retirement.
Charman pointed out that a first-time buyer taking out a 35-year mortgage at age 35 effectively becomes a later life borrower from the moment the loan is completed.
The panel also debated whether the growing proportion of mortgages extending into retirement should be a cause for concern. While around 40% of mortgages now run beyond retirement age, none of the speakers described the trend as a crisis. Charman suggested the market was in a period of transition, while Dan Payne of L&C described the shift as a warning sign rather than a point of alarm: "It's an adaptation, a shift in the market, but we're not at crisis yet."
The case for holistic advice
A recurring criticism throughout the discussion was the lack of truly holistic advice. Several speakers argued consumers are often funnelled into one of two distinct advice channels, mainstream mortgage advice or equity release advice, when many borrowers sit somewhere between the two.
Borrowers can be directed down a particular route depending on which adviser they approach, rather than receiving advice based on their broader financial circumstances. Charman said a holistic approach would be key, with advisers encouraged to consider clients' long-term plans, retirement income and future borrowing needs rather than focusing solely on the immediate mortgage transaction.
Source: Mortgage Solutions