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More lifetime mortgages emerge

Figures released by the Council of Mortgage Lenders (CML) show an increase in new lifetime mortgages over 2006, though the amount borrowed fell over the same period.

The number of new loans rose from 23,215 in 2005 to 23,786 last year, CML revealed.

However, lending for new lifetime mortgages totalled £971 million in 2006, down from £1,048 in the previous year, with the average loan down from £45,000 to £41,000 over the same period.

Commenting on the figures, CML's head of policy, Jackie Bennett, said: "The trend towards smaller loan amounts on lifetime mortgages suggests that lenders and intermediaries are being careful to ensure that people are only borrowing what they need."

The figures are particularly good news for older people seeking to release equity from their homes, Ms Bennett added.

The total value of lifetime mortgages outstanding in the UK stood at £6.6 billion at the end of 2006.

The average cost of a lifetime mortgage has fallen from 8.5 per cent of a property's value five years ago 6 per cent now, with this decrease being attributed to increased competition by the lenders.

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01/02/2007 11:49:50

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