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Mortgage market criticised for lack of innovation

Mortgage market criticised for lack of innovation

Category: Mortgages

Updated: 13/05/2013
First Published: 13/05/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Homeowners across the UK have called for the introduction of more innovative mortgage products to assist borrowers.

According to a survey by the equity loan provider, Castle Trust, 79% of people would welcome creative mortgage finance alternatives such as equity loans.

The option to reduce monthly mortgage costs via an equity loan was supported by 37% of respondents, whilst over half (53%) claimed it would be "uncompetitive behaviour" if mortgage lenders refused to offer such loans as part of their product range.

Only one-in-five people believe the market currently offers an adequate and acceptable level of choice for borrowers.

The Government announced the launch of its own equity loan programme last month, designed to assist buyers who are struggling with raising large deposits.

The Help to Buy scheme offers borrowers an extra 20% equity loan to purchase a new build property, with the loan staying interest-free for the initial five years.

Sean Oldfield, chief executive officer at Castle Trust, said: "There is strong demand and interest from borrowers in more creative solutions to housing market issues including the need for large deposits and the potential risks of homeownership."

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