A recent study into the preferences of lifetime mortgage customers has revealed an interesting trend – fixed rates are king. In an era where financial stability is more sought after than ever, it turns out that for a significant portion of mortgage customers, locking in a fixed rate is top of the agenda.
Key Findings from the Survey
The study, which surveyed 800 individuals from Pure Retirement’s customer base, uncovered some striking preferences:
- Fixed Rates Reign Supreme: A whopping 37% of respondents marked fixed rates as their number one priority. Moreover, 75% included it in their top three reasons for choosing a particular mortgage product.
- Security Matters: Following fixed rates, the security offered by a no-negative-equity guarantee was the second most valued feature. This option was the most important for 19% of the surveyed individuals and was among the top three for 45%.
- Borrowing Flexibility: The ability to borrow more money, subject to availability, ranked third in importance. It was the most crucial factor for 12%, with 38% placing it in their top three considerations.
- Other Important Features: Additional features like the ability to port the mortgage, options for making optional repayments, and the flexibility of making regular optional repayments without incurring early repayment charges were also highlighted. These features were critical for about 9% of respondents and were included in the top three by 30% to 36% of the participants.
Insights from Pure’s CEO, Paul Carter
Paul Carter, the CEO of Pure, shared his thoughts on these findings:
- Customer Priorities: Carter emphasised the importance of understanding customer preferences in later life lending. The study’s results align with the challenges faced by the industry, especially post the mini budget last autumn and its impact on the Bank of England’s base rate.
- Economic Outlook: With a recent drop in inflation and cautious optimism about the potential decrease in the BoE’s base rate, there’s hope for an economic recovery.
- Future Prospects: He expressed enthusiasm for supporting applicants with attractive lifetime mortgage solutions when they decide to explore later life lending options.