Segmenting Later Life Borrowers

Product Journey

Hodge Lifetime mortgages are specifically designed to meet a range of client needs. When discussing with your clients, there are some fundamentals that can help you navigate our product range.

Using affordability and attitude to risk as key considerations can help you and your client identify which type of mortgage could be suitable.

Affordability

Reviewing your client’s income and outgoings can determine if monthly mortgage payments are possible. As a responsible lender, we review affordability across the term of the mortgage and not just at day one. Lifestyle changes can impact on future income. Death of a spouse, pension drawdown, and rising healthcare costs can impact not only income, but can erode savings more quickly than anticipated.

Attitude to Risk

Taking on a mortgage at any time of life is a major consideration, which can feel even more of burden later in life. Research also shows that people tend to become more cautious and more risk averse as they age.

If the attitude to risk is lower, you should consider products with built in safeguards that could deal with payment issues in future.

Our handy product matrix below can help you and your client identify product options. Please note this is intended as a guide only.

Attitude to Risk
Affordability Lower Higher
Poor Equity Release Equity Release/
Retirement Mortgage
Good Retirement Mortgage/
55+ Mortgage
55+ Mortgage

A focus on product safeguards

Matching the right later life lending product to the right customer requires an appreciation of the borrower’s risk appetite and the ability to afford the loan.

The table below considers the different level of product safeguards in place for the Hodge Lifetime range of later life lending products, helping you to match the right product to the borrower’s risk appetite.

Product Level of Safeguard Safeguards in place
55+ Low Affordability assessment covers the entire term of the mortgage
Retirement mortgage Medium Interest roll-up option means mortgage payments can stop at older age.
NNEG covers any capital shortfall at the end of the term
Lifetime and Indexed equity release range High No mortgage payments required
Security of tenure for life
NNEG
Downsizing protection equity release range High No mortgage payments required
Security of tenure for life
NNEG
Downsizing permitted without early repayment charges

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Welcome to Hodge Lifetime

This site is intended for use by UK financial advisers only. If you’re not a financial adviser please visit the Hodge Lifetime website. Select from the options below.