{"id":22015,"date":"2018-11-14T14:58:02","date_gmt":"2018-11-14T14:58:02","guid":{"rendered":"https:\/\/www.buyassociation.co.uk\/?p=22015"},"modified":"2018-11-14T14:58:02","modified_gmt":"2018-11-14T14:58:02","slug":"retired-borrowers-set-to-become-the-fastest-growing-mortgage-sector","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-us\/2018\/11\/14\/retired-borrowers-set-to-become-the-fastest-growing-mortgage-sector\/","title":{"rendered":"Retired borrowers set to become the fastest-growing mortgage sector"},"content":{"rendered":"

Lending into retirement is expected to be the fastest growing segment in the specialist mortgage market over the next two years.<\/strong><\/p>\n

According to the latest Financial Adviser Confidence Tracking (FACT) Index from Paragon, nearly 80% of mortgage intermediaries are expecting a retirement<\/a> lending boom. Today lending into retirement accounts for around 11% of specialist mortgage cases. Despite self-employed cases<\/a> accounting for 23% and complex income 13%, intermediaries believe it is the retirement sector that has the most potential for growth.<\/p>\n

Broadening the options of older customers<\/h4>\n

In a move to broaden the product choice for older customers the Financial Conduct Agency (FCA) redefined the treatment of retirement interest-only (RIO) mortgages as standard mortgages earlier this year \u2013 permitting retirement interest-only mortgages. The FCA believes that interest-only retirement borrowing will help older customers with reliable income access lending later in life.<\/p>\n

A safety net for maturing interest-only mortgages<\/h4>\n

For retired borrowers concerned about repaying an existing interest-only mortgage<\/a> due to a shortfall in funds to clear the loan, the option to refinance will be a relief. Rather than being forced into a house sale or taking on an expensive personal loan to make up the shortfall, a retirement interest-only mortgage offers an affordable and accessible safety net without additional burden.<\/p>\n

Lenders need to step up<\/h4>\n

Intermediaries are experiencing great demand from customers with more complex requirements than ever before, but it is the lenders that need to step up to meet their needs. For later-life borrowers, lenders need to review their policies on maximum age limits, the diversity of acceptable income sources, the availability of interest-only products and the choice of repayment strategies.<\/p>\n

This week, Marsden Building Society extended its Older Borrower range<\/a> with the introduction of a retirement interest-only mortgage available to those over the age of 55 for purchase or remortgage up to a loan value of \u00a3750,000.\u00a0 The product is available as a 3-year fixed rate of 3.49% up to 50% LTV.<\/p>\n

Marsden are not the only lenders expanding their range to assist older borrowers. Leeds Building Society, Buckinghamshire Building Society and Scottish Building Society are all offering retirement interest-only products, and more will follow as the need to cater for a more diverse range of customers than ever before becomes the norm.<\/p>\n

For retired borrowers considering an ROI mortgage as an alternative to equity release or property sale, the usual rules apply:<\/p>\n