Interest Only Mortgage News

What is the Future Outlook for the Pensioner Mortgage?

September 25th, 2013

Having a mortgage during retirement was considered taboo until not so long ago, and products such as the Halifax interest only lifetime mortgage, which proved so popular recently, may well have been blacklisted in those days. However, changing social and economic trends have changed the way we think about borrowing. Mortgages and loans have evolved to suit individual needs, and today borrowing has very much become a part of the social fabric.

Financial regulatory bodies such as the FSA may not be overly enthusiastic about mortgages aimed at pensioners, but the fact is that there is a growing need for these products in the market. Traditional lenders are shying away from providing mortgages after 75 years, and this leaves pensioners with very few options to choose from. The Halifax interest only lifetime mortgage was a good example of the retirement mortgage, and being interest only it ensured that the balance remains the same until the end. This mortgage proved to be an instant hit, and its withdrawal in August 2011 left a huge chasm in the retirement lending sector.

Companies and high street lenders alike are bound to see the discrepancy between the demand and supply for niche retirement mortgages. This is a huge business opportunity as the market for a pensioner mortgage is only going to increase from hereon in. The fact is that times are such that many of us are not left with a choice but to borrow during retirement and this creates a genuine need for retirement-specific mortgages.

While there are not many options in this sector currently, the future of retirement mortgages in the UK does seem somewhat positive. Some major equity release companies and lending companies are showing an interest in capturing this very eager market. A wider variety of products such as the Stonehaven interest only lifetime mortgage are more than likely to be available in the future.

Stonehaven currently offers some good options for pensioners. Their Stonehaven Interest Select is an interest only retirement mortgage that serves as a good alternative for the older Halifax pensioner mortgages. More2Life, the equity release specialist, has committed to enter the retirement mortgage market on the 1st November 2012. Just Retirement who are funding the new more2life interest only plan, may also be entering the retirement mortgage market themselves at some point in the near future.

Hodge Lifetime have also expressed an interest in similar products. In fact, Hodge Lifetime has already entered the fray with their new roll up equity release scheme. Hodge Lifetime are currently unique. They may interest those who are looking for the option of not just paying off the interest, but also some of the capital without penalty. Interestingly, Hodge Lifetime allows 10% repayment of the original capital borrowed, without penalty. No other equity release company can offer this facility. In theory, this unique scheme with its 10% penalty free repayment allowance has the potential to reduce the balance! Effectively, this could be viewed as the first capital and repayment equity release mortgage.

For further details on the Hodge Lifetime equity release scheme call 0800 678 5169.