Over three in five (63.6%) equity release borrowers who commit to paying some or all of their interest on their loans to avoid it rolling up are under 70, more2life has revealed.
Customer data from the lifetime mortgage lender found that under 70s represented almost two thirds of its interest reward customers, and among standard lifetime mortgage customers, where the interest rolls up, they made up half (49.9%).
Borrowers aged 60 to 64 represented the largest single age group among interest reward customers, accounting for 25.9% of all cases, while those aged 55 to 59 also made up a greater proportion of interest reward lending standard mortgage borrowing.
More2life said the figures suggest that younger equity release borrowers are most likely to choose to pay some of the interest on their loan to protect the equity in their property.
Interest reward products enable customers to secure reductions to their interest rate through qualifying repayments, helping to reduce the long-term cost of borrowing.
By limiting the impact of interest over time, the products can also help customers retain more equity within their homes, creating greater flexibility to respond to changing circumstances through retirement.
The lender believes the data reflects a broader shift within the market, with advisers increasingly helping customers consider a wider range of solutions designed to meet differing retirement objectives.
CEO at more2life, Dave Harris, stated: "The later life lending conversation is evolving and while lifetime mortgages were historically often viewed as a solution that customers considered relatively late in retirement, we’re seeing homeowners engage with advisers much earlier and take a far more proactive approach to planning.
"The fact that Interest Reward products are attracting a significantly younger customer base suggests many borrowers want to stay flexible while also taking practical steps to manage the long-term cost of borrowing.
"Someone who takes out a lifetime mortgage at 60 could have it for 25 or 30 years, so the way interest builds up makes a big difference to what’s left at the end. We’re also living in a time where many people in their late 50s and 60s are still working and can put some of that income towards the interest. As a lender, we're committed to ensuring advisers have access to a broad range of solutions capable of supporting different customer needs and circumstances."












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