Mortagage Solutions - Rising equity release rates raise concerns around rolled-up debt – analysis
The increase in equity release pricing has raised concerns amongst brokers about rolling-up debt hitting the property value faster, meaning borrowers could accrue more debt at a faster rate.
Aaron Strutt, product and communications director at Trinity Financial, said that lifetime mortgages were being “promoted as solution to lack of income during the cost of living crisis”, but it was crucial that consumers understood the ramifications of rolled up interest.
He added: “It is crucial that borrowers fully understand the impact of the rolled-up interest. These products may still be the only option or the most suitable route for a client, but people need to go into these transactions with a full understanding of the implications of the current rates.”
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