09 September 2017
City regulator may approve ‘mortgages for life’
Mortgages that last a lifetime may be made available to older borrowers from as early as next year.
Following reports that the Financial Conduct Authority (FCA) plans to give proposals the go-ahead, murmurs are abound regarding the potential terms of new products.
If green-lighted, the mortgages would not have to be repaid until the borrower dies or goes into care - throwing a lifeline to thousands of later-life customers trapped in interest-only mortgages they can't repay.
Should the rules change, borrowers would be able to use the sale of their home as their plan to repay their mortgage, and continue paying only the interest until they die or move into care.
It is expected that larger lenders would follow the smaller banks and building societies which have already shown an interest in offering the product.
OneSavings Bank and new lender, Mortgages4Life are among a number who have already pledged to offer the loans if the City watchdog presses ahead with its plans.
High Street giants Santander and HSBC welcomed the announcement but said they would wait to see the Financial conduct Authority's (FCA) final rules next year before deciding their own plans.