Marsden Building Society speaks out for Older Borrowers
11 May 2016
Steve Robinson, Head of Lending at Marsden Building Society voices an opinion on a growing audience of Older Borrowers and the need for a ‘transition mortgage’ for some.
One key concern among the demographic of older borrowers is the number of people who have interest-only mortgages and no way to pay them back when the term ends. Although equity release is an option for some, others may not qualify for the traditional equity release products on offer because they do not own a sufficient amount of equity in their home – typically two-thirds equity is needed to qualify.
Steve Robinson, Head of Lending “we do see a market for a ‘transition mortgage’, helping clients bridge the gap in continuing with a conventional interest-only mortgage before considering equity release as one potential future option. The retirement landscape is changing. People are increasingly looking to work longer and with increased flexibility surrounding retirement planning”.
The Marsden older borrower range offers interest only to a max LTV of 60% with the option to extend to 70% with the balance on repayment and support those aged 85 at mortgage term end date. This may prove to be a solution for some customers who can support a conventional mortgage, who may not have sufficient equity in the property for equity release, or it is too early in the retirement planning to take a lifetime mortgage at this point.
“It is important that we operate in a responsible way when lending into or in retirement. We look at older borrowers differently to a first time buyer in their 30s, the income is different, their needs are different and often their borrowing requirement supports a desire to remain in their existing home or to release wealth from the property to support their plans in retirement…. whether travelling, support for generational mortgages. We remain flexible on the purposes of borrowing and retain a focus on the affordability of the loan, both now and should circumstances change.”
The Society released their Older Borrower products earlier in the year and sees a growing demand in the market.
