Lending to the retired | What’s the appetite?
20 March 2018
Steve Robinson, Head of Lending at Marsden Building Society explains the growing appetite around interest only mortgages in retirement and how the Marsden is positioned to support it.
There are a growing number of interest only mortgages held by the 55+ and a similar number of borrowers who aren’t ready or willing to transition onto Lifetime Mortgage solutions, so, what are their options?
Steve Robinson comments, “We are responding to a growing need to support borrowers who wish to stay in their home in retirement. We don't take a standard approach to interest only borrowers, our individual underwriting allows us to consider the clients circumstances which can include downsizing as the ultimate repayment vehicle. For many customers, they are simply looking to extend their current term often modestly into early requirement and have found this challenging with existing lenders. Customers will still have to be able afford the ongoing interest payments, but loans will ultimately be repaid through the sale of the property. Our tailored mortgage range and older borrower services means we are ideally placed to help customers. ”
Recognising the importance of intermediaries and the need to raise awareness of the retirement lending solutions available, the Society has supported a number of its network partners with specific later life events and content.
John Coffield, Head of Mortgages from Paradigm comments, “We recognise that to support this market, intermediaries and lenders must work together. The market is set to grow and banks and building societies must be in a position to respond. We welcome the announcement from the FCA to review later life lending. The FCA is consulting on the reintroduction of interest-only mortgages for the elderly which run until the borrower’s death or when they move into residential care.”
Both lenders and intermediary networks must work to build awareness around the options available and work to ensure that intermediaries and their clients have access to all the solutions.
