The capital release fixed rate starts at 5.79 per cent and is available to the over 60’s up to 20 per cent loan to value, and to the over 70’s up to 30 per cent loan to value. The product carries a £595 arrangement fee.
In addition a product with free valuation and no arrangement fee is available at a rate of 6.15 per cent based on the same loan to value and age criteria as above.
Mark Howell, head of marketing at B&W, commented: "The introduction of these rates confirms our intention to become a leading provider of lifetime products. I believe they are currently amongst the most competitive in the market, representing an attractive proposition to those clients wishing to raise capital from their property.
"Predictions are that the market will grow significantly over the next few years as people seek to utilise the equity in their property to fund their retirement plans. Our range of products is competing in the capital release sector of the market which currently represents about two thirds of this market."
In a recent press release* the CML stated that the equity release market has seen modest growth in the second quarter of 2005, with the number of loans increasing by 6 per cent. Over the first six months of 2005, around 10,900 equity release loans were made with a total value of £492 million. These figures bring the total value of outstanding equity release mortgages to £4.6 billion, representing 94,000 mortgages.
With the UK mortgage market more dynamic than ever and in the context of a challenging economic environment, mortgage lenders need to keep their offers relevant and competitive. Bristol & West Mortgages has designed its new Lifetime products to meet the changing needs of intermediaries and their clients.
The capital release market is estimated to be about 65 per cent of the total equity release market, and is predominantly interest roll-up mortgages.
FSA regulation seems to have legitimised this market and research indicates consumer confidence is high, which should lead to greater demand throughout the market.
