With rapid growth across the later life lending market, there are now a range of options available to older homeowners in addition to equity release. David Forsdyke, Head of our Later Life Finance service, explains.

Last week, I advised a consumer via a national newspaper that equity release wasn't right for them.

It's a position advisers should be taking more often. The FCA said last month it was “disappointed” to find many examples of firms failing to offer borrowers alternatives to equity release, with many focusing largely on lifetime mortgage products.

But after several years of rapid growth across the later life lending market, there are now a wide range of options available to older homeowners aside from just equity release. It is more important than ever to seek advice about what’s right for you.

Everyone’s motivations for borrowing are different so it’s critical to assess the best route to achieving your objectives. Whatever your circumstances are, there are numerous important factors and options to consider when finding the best solution.

I recently advised a wealthy 75-year-old client who owned an apartment near Regent’s Park, London. The client had taken interest only mortgages with a private bank for a number of years and the bank was becoming increasingly uncomfortable about how the client intended to pay them back.

Throughout his working life, the client imagined he would sell this property and downsize to the country when he retired, repaying the mortgage in the process. But with such an ideal location, a high-level concierge service and easy access to shops and the park, he and his wife reached the conclusion they wanted to remain in their London home rather than sell.

Concerned about how he would pay his mortgage back, the client contacted me to explore the options available to him – of which there were many.

Firstly, we explored whether he could repay the mortgage, however his finances were complicated, with much of his wealth held offshore or in areas not easily liquidated. The tax implications alone made repayment inappropriate. His retirement income was healthy enough that some form of interest-only mortgage borrowing was a strong option for him.

Secondly, a lifetime mortgage (the most common form of equity release) was considered. Here, he would have the option of paying the interest or allow the interest to roll up. There were a number of advantages to this, but they came at the cost of higher interest rates than elsewhere.

We also looked to the growing number of mainstream mortgage lenders that have more relaxed criteria around age restrictions. In the end, the client was able to show healthy retirement income and had a strong preference for a long-term, more permanent solution, so I steered him towards a retirement interest-only mortgage at a low interest rate. It was a thorough discussion, demonstrating the breadth of options available to wealthy homeowners today.

It's important people in or approaching retirement find an adviser who will walk you through all the alternatives, whether they relate to equity release or not, because the options available for clients today are far broader than ever before.

If you are interested in exploring how later life lending could be used in your retirement and would like to discuss your options, contact our experts who would be happy to help. We have access to all providers, and can help you find the most suitable solution available in today’s market.