Criteria Hub has launched a detailed set of criteria that helps advisers understand some of the complexities of retirement interest-only mortgages.
Criteria Hub allows advisors to not only identify which lenders offer these mortgages but also for those that do, helps them understand some of the more detailed criteria such as maximum LTVs and what is an acceptable method of ongoing affordability for joint applicants.
Jason Hegarty, director at Criteria Hub, said: “We expect RIO mortgages to be a hugely popular option for older borrowers.
“Unlike equity release mortgages, the FCA doesn’t require advisors to have any additional special permissions to sell RIO mortgages and as such borrowers will have greater access to RIO mortgages via intermediaries.
“It’s great to see a few lenders already moving into this space and we expect to see more follow throughout the rest of 2018 and beyond.”
David Booth, mortgage proposition manager at Openwork, said: “Criteria Hub has been getting rave reviews from our advisers since we launched.
“It’s a great tool that solves the problem of checking multiple lender policy pages, and having to call lender business development managers to check criteria when placing mortgage cases and the inclusion of retirement interest-only criteria will be a valuable addition.
“Mortgage advisers and their clients looking for mortgages in their later life are becoming increasingly spoilt for choice as lenders look to enter this growing market.
“Criteria Hub will help advisers make sure they deliver a good outcome for their clients and secure the most appropriate mortgage for their needs”.
James Young, national account manager at Hodge Lifetime, said: “Later Life Lending is growing significantly year on year as an aging UK demographic takes hold coupled with the high proportion of UK property which is owned by this particular age group.
“RIO mortgages are set to become a popular choice for older borrowers who need an affordable mortgage into retirement without the worry of a term end date.
“When considering the most suitable plan for an older borrower it’s important to consider the pros and cons of an open-ended mortgage against plans with a fixed end date, and we’re delighted to be working with Criteria Hub to help give advisers all the answers they need for this emerging product category.”
Tom Gurrie, intermediary sales manager, Vernon Building Society said: “We’re delighted to be one of the first lenders to show our RIO products on Criteria Hub.
“Although our schemes have been around for some time now, the move earlier this year by the FCA to encourage greater availability of such schemes to the public, has led to a big increase in enquiries which means it’s important we get our message out to the wider broker community.
“That way, more people will have more options when they are considering their later-life financial requirements.”
Penrith Building Society is the newest entrant to offer this type of lending.
Michelle Stevens, retail operations and distribution executive at Penrith Building Society, said: “It is pleasing to see the regulator adjusting their approach to these loans.
“Not so long ago borrowers found themselves in a difficult situation when their current interest only terms ended, options available at that time were limited and frankly, not all lenders dealt with these cases in what could be described as a compassionate manner.
“Pre ‘RIO’ we attempted to assist where possible by removing our maximum age and permitting a good length term, where it was deemed appropriate – however, we are now really pleased to have been able to formalise this type of lending into our lending policy, offering retirement interest only across our standard mortgage range.
“We strongly believe that older borrowers should not be discriminated against due to their age and that is why we are happy to allow access to any of our mortgage products for this type of lending.”
Richard Groom, Tipton’s head of sales, said: “For many years now, older borrowers have seen their mortgage options dwindle so it’s encouraging to see the FCA acknowledge this.”