A new study has revealed consumers are receiving inaccurate online information regarding equity release (ER), with over 80% of online calculators providing misleading data.
It was noted that financial data within the equity release market has been somewhat behind in comparison to the sourcing tools available in the traditional mortgage market, more products and online platforms do now exist to enable consumers to source, research and discover their own personal financial options.
However, findings from Equity Release Supermarket (ERS) suggests that following a conducted and co-ordinated UK review of selected websites, more than 80% of data gained from online equity release calculators could be considered as misleading to consumers.
ERS hosted an analysis of comparative websites – offering consumers an online calculator in which they can determine how much equity they can borrow – to understand the accuracy across the market.
The research was conducted on the same day and measured against IRESS (a product sourcing tool for advisers), with three scenarios, including the age of the customer, their property value, and their loan to the value of their property (LTV).
The results of the research highlighted that over 85% of equity release calculators provided inaccurate information. Almost a quarter of those calculators gave lower LTVs and loan amounts than IRESS and ERS.
However, more troubling was that more than 63% of the calculators checked provided higher LTVs and maximum loan amounts than IRESS and ERS. It should be noted that given these products do not exist, consumers would not be able to proceed further. However, with Consumer Duty being brought into force on 31st July, this certainly fails to set the standard of firms acting in good faith.
The data extended as far as to showcase that a customer could borrow more than the largest loan available within the equity release market. For example – An 85-year-old with a £300,000 property, was given a loan amount of £192,000, representing a 64% LTV, when the largest loan available at the time of the study was a 50% LTV (£150,000).
Further research was evident for those consumers aged 70+ – where 13 in 16 sites reported higher maximum lump sums for these consumers than would be available to them.
This discovery comes as ERS expand their online offering to provide more research and extensive information and ultimate accuracy for consumers. Given the firm has inbuild technology that allows for real time data to be pulled centrally from the database, consumers don’t suffer from any time delays, changes within the market or data fluctuations.
Mark Gregory, Founder and CEO at Equity Release Supermarket commented:
“This study was conducted in light of the new Consumer Duty regulations launched this month. Our aim is always to support consumers by providing real-time, accurate data, and to help the wider industry through the provision of smartER technology.
We appreciate that it’s a challenging time for the industry, however it’s important we collectively drive the best possible consumer standards and we’re here to support any equity release firm in achieving that.”