Nationwide launches later life lending products for older borrowers
The mutual has introduced three mortgage products, accessed directly through its own specialist later life mortgage consultants.
The move is in response to feedback from Nationwide members about their evolving needs and comes against a backdrop of demographic and social changes. People are living longer and will need adequate funding to support their lifestyle, said the Society, noting that those in middle age have an average of £125,350 equity in their home.
Lifetime mortgages have recently hit record lending levels and, while the Retirement Interest-Only sector is still in its infancy, the number of products available is rapidly growing, with Nationwide the first major lender to enter the market. Last week Melton Building Society entered the RIO market and Vernon launched offset RIO mortgages.
What’s on offer?
Alongside Nationwide’s standard mortgage lending options, the Society will offer three later life lending options.
These are a Retirement Capital and Interest product (RC&I), a Retirement Interest Only (RIO) mortgage and a Lifetime Mortgage for older borrowers.
RIO rates start from 2.74% for tracker products with no fees, while fixed rates start from 2.99%.
Rates for Retirement Capital and Interest (RC&I) mortgages are in line with the core Nationwide rates and start at 1.89%. The Lifetime Mortgage offers fixed rate products and these start at 3.49%.
Who can take a Nationwide later life deal?
Applicants must be Nationwide mortgage members over 55, both if joint, and can apply up to age 85. There are no product, valuation or advice fees, and borrowing can be for a number of reasons including home maintenance and improvements, gifting to family members, holidays and debt consolidation.
Initially the products will only be available to existing Nationwide mortgage members, but the plans are to roll out the later life mortgage products more widely by Summer 2019.
Jason Hurwood, Nationwide’s director of home propositions, said: “The later life lending options that are now available through our dedicated mortgage advisers mean we are the first major high street lender to establish ourselves to support that growing demand. With the variety of options available when it comes to accessing the value that may be locked up in their homes, they need to be supported to take charge of their futures and find the right option for them and their particular circumstances.
“We have an ongoing plan to address the needs of a changing and ageing population, and to design products to support people in or approaching retirement.”