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Nationwide Building Society has extended its later life mortgage products and advice to include both existing and new customers wanting to borrow later in life.
The building society now offers three Nationwide Later Life mortgage products to borrowers aged 55 and over, as well as access to its Later Life mortgage consultants. The products available are a Retirement Capital and Interest product (RCI), a Retirement Interest Only (RIO) product and a Nationwide Lifetime Mortgage.
The move comes at a time when the mortgage industry is increasing its retirement mortgage products to meet the demand from customers, which can be seen with the growth in RIO mortgages. As well as this, many providers have extended their maximum mortgage age to those aged 80 years and over.
Rachel Springall, financial expert at Moneyfacts.co.uk, said: “There may well be borrowers who feel more comfortable with a face-to-face approach with a trusted brand when it comes to arranging their mortgage, so they could well go to a high-street branch as their first port of call. In this instance, Nationwide’s decision to allow both members and non-members to apply for their Later Life range is an exciting move in response to the growing demand for this type of product.
“The products on offer through Nationwide have been carefully priced to sit comfortably in the market and with such a prominent brand backing these type of deals, hopefully this will inspire other well-known brands to consider competing in this market.
“It has been just over three years since Nationwide introduced a range of mortgages aimed at customers looking to borrow in retirement, with a maximum age of 85 at the end of the mortgage term. There are many other lenders which have increased their maximum age too, but the majority of brands that have a maximum age of 85 or over are mutuals - in fact, over two-thirds of these lenders are mutuals.
“The mortgage market has had other influences which have resulted in lenders either launching new deals or tailoring their existing range to accommodate older borrowers, such as the rise of the RIO mortgage.
“In terms of RIO mortgages, the market is still relatively niche and it remains the case that building societies are fuelling this arena. A RIO mortgage is designed for borrowers to pay monthly interest on their loan until they go into long-term care or pass away, at which point, the mortgaged property is then sold to repay the loan. This may work out as the best solution for some, but it also poses issues for any relatives – such as the impact of inheritance, so they must be considered carefully. Lifetime mortgages should also be reviewed in this instance, ideally with an independent advisor.”
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