Retired borrowers set to become the fastest-growing mortgage sector


Lending into retirement is expected to be the fastest growing segment in the specialist mortgage market over the next two years.

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

Broadening the options of older customers

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 – 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.

A safety net for maturing interest-only mortgages

For retired borrowers concerned about repaying an existing interest-only mortgage 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.

Lenders need to step up

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.

This week, Marsden Building Society extended its Older Borrower range 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 £750,000.  The product is available as a 3-year fixed rate of 3.49% up to 50% LTV.

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.

For retired borrowers considering an ROI mortgage as an alternative to equity release or property sale, the usual rules apply:

  • Do your research
  • Take expert advice
  • Make sure that an ROI mortgage is the right choice for your circumstances

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800


Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator


Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.


Not a member? Sign up for free

Older couple smiling

Retired borrowers set to become the fastest-growing mortgage sector


By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.