Nationwide to launch interest-only retirement mortgage

Nationwide to launch interest-only retirement mortgage

Nationwide will be the latest lender to launch an interest-only mortgage into the later life lending space, it has emerged.

The mutuals’s CEO, Joe Garner, said in its annual results statement that this would be its latest move into the retirement market, after entering the equity release space last year. 

“Member needs change in later life, so we expanded our mortgage range with a lifetime mortgage which will allow people to access equity in their home in later life," he said.

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"Next, we plan to launch a retirement interest-only mortgage, giving members more choice in managing their finances as they get older.”

The society said that it could not give a date on when the product would be launched, or any further details.

The building society is the latest to enter the later life lending market after the FCA published a paper last year criticising lenders who would not lend to older people.

Challenger bank Aldermore said last week that it is to launch a specialist mortgage aimed at those aged 55-plus, in what bosses said was their response to a growing market need.

The Post Office has also launched an interest-only mortgage option for those who want to borrow money up to the age of 80, or a repayment mortgage up to the age of 90.

Kevin Dunn, mortgage expert from Furnley House in Leicestershire, said that the new entrants were welcome.

“It’s completely logical,” he said.

“When people have pension income that is secure they may well want to borrow money - I’ve a client at the moment who wants to release some money to give to a daughter to buy a home.

"They don’t want to downsize yet, but she wants to buy now, and they have £27,000 in mortgage income a year. This is right for them.”

"The more lenders coming into this space the better, as it will make sure it is competitive. It is great to see a big lender like Nationwide coming in.”