Following The Cambridge’s announcement that they removed the upper age limit on their repayment lending products in 2016, introducing a dedicated Retirement Interest Only mortgage to provide more lending options for this group of borrowers is a natural addition to their lending proposition.
The new RIO product is being launched exclusively via its direct lending channel initially, and is aimed at supporting both existing borrowers looking for alternative borrowing at the end of their current term, as well as new customers looking to free up equity in their property.
The Cambridge’s RIO product is offered at a 3.39% variable rate for the term of the mortgage, with a maximum LTV of 55% and free valuation fees. The mortgage has a £500 fee, but this is not charged to existing Cambridge Building Society mortgage customers. There are also no early repayment charges on this product, giving borrowers the flexibility to overpay or pay off early if they wish
This announcement comes at a time when industry reports are stating that mortgage debt for over 65s is projected to increase. With an increase in house prices and older householders, the need for lending to those in later life is expected to continue to grow
Dan Barker, Product Manager at The Cambridge comments on the new release, “With an increase in the number of older households and rising house prices resulting in higher mortgage values, we recognise that there is a growing need in this segment for a mortgage to help those who would like to unlock the value in their property to fund their retirement or support their loved ones.”