More unfortunate news, Godiva Mortgages are withdrawing their Lifetime Mortgage from next week.
Interestingly this is not because of a lack of funds but "it is now difficult to offer a long-term rate which we believe is fair to customers". In other words, they have a choice to increase rates or pull out.
They've chosen to pull out because they can make more profit on mainstream lending - my interpretation of course.
This challenges the perception of Equity Release being too expensive. Although the bank base rate is only 0.5%, the cost of funding Lifetime Mortgages - which are fixed for life unlike mainstream mortgages - is no cheaper than it was a year or two ago; indeed some rates have crept up over recent weeks.
By the way, existing customers with a Godiva Lifetime Mortgage are not affected and Godiva hope to return to the market in the future.
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