01 May 2013
LENDERS AND BORROWERS NEED TO FOCUS ON SOLUTIONS TO INTEREST-ONLY TIMEBOMB - KRS COMMENT ON THE INTEREST ONLY RELEASE FROM THE FCA
Dean Mirfin of Key Retirement Solutions said: "The interest-only timebomb is potentially terrifying and could be a slow motion disaster for lenders and borrowers with at least 60,000 borrowers facing capital repayments by 2020 without any means of doing so and another 260,000 facing the same financial crunch over the next 30 years.
"We have for some considerable time been trying to focus both lenders and borrowers alike on the solutions and not the problem. It is imperative that all borrowers have access to the right advice to consider thoroughly all of their options before its too late.
"Lenders must not allow borrowers to bury their heads in the sand any more. Advice for many is what is needed now ahead of the problem".
"Those most at risk are the over-55s as this is very much a retirement income crisis. But there is time to address the crisis and there are solutions already available ranging from downsizing your home to considering switching to an equity release lifetime mortgage which enables them either to continue paying interest or have interest roll up while escaping the looming repayment date.
"Equity release specialist lender More2life only recently called on lenders to engage with their customers now to identify those who need help and advice now and to look to solutions which already exist.
"Borrowers should not panic - there are solutions available if they take advice and they can deal with the situation if they take action. That should include looking at all aspects of their finances including their pension fund to maximise income and tax-free cash from annuities."