Providers risk significant loss on equity release

The report, Equity release in the UK suggests lenders offering no negative equity guarantees need to be certain their actuarial calculations and house price projections are robust or face the prospect of unrecoverable losses on the deal and unhappy relatives of the customer. The report says at a fixed interest rate of 7.18%, with rolled up interest, a mortgage debt will double every 10years. Given the average 65-year-old male will live 19 years further there is a risk, it claims, it higher fixed interest rates that without any house price inflation there will be negative equity at the ...