Moneyfacts: Number of RIOs on the rise
The quantity of retirement interest-only products on the market has almost doubled between February 2019 and February 2020, according to Moneyfacts.
Data collected by Moneyfacts shows that in February 2019 there were 38 RIO products, which rose to 74 this month.
The number of providers also rose over the same timeframe, increasing from 12 to 18.
Furthermore, the data shows that the average rate has also fallen between February 2019 and February 2020, declining from 3.50% to 3.47%.
The FCA’s reclassification of RIOs as mainstream mortgages rather than equity release products in early 2018, has resulted in the number of deals available rising.
Research conducted by Ipswich Building Society shows that 60% of borrowers over the age of 50 felt that there were fewer mortgage products available to them compared to younger borrowers.
According to the building society, over half of those over 50 also believed that they had fewer mortgage providers to choose from.
Eleanor Williams, finance expert at Moneyfacts, said: “Historically, many older borrowers who had retired or were shortly due to do so, found it difficult to find a new mortgage deal.
“Over the past 12 months alone, not only has the number of providers active in this sector increased, but the number of products available has almost.
“In addition, the average interest rate charged has also fallen, which is a positive step.
“Those looking to take advantage of a RIO mortgage deal should consider their next steps carefully.
“Lifetime mortgages and equity release products may also be available, and so seeking independent financial advice could be invaluable in ensuring you select the right product for your circumstances.”