Older borrowers are at greater risk of purchasing unsuitable equity release products or lifetime mortgage products, the Financial Conduct Authority (FCA) has emphasised in a letter.
Consumers facing financial stress are also more susceptible to the purchase of unsuitable equity release products, the letter noted. Given ongoing cost-of-living challenges, demand for credit is expected to rise even as rising interest rates are making borrowing less affordable.
The FCA is currently developing new Consumer Duty proposals that would set a higher standard of care that mortgage providers must meet.
A lifetime mortgage is a long-term commitment which could accumulate interest and is secured against your home. Equity release is not right for everyone and may reduce the value of your estate.