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Shawbrook to offer pensioner interest-only loans

by: Mortgage Solutions
  • 25/01/2016
  • 0
Shawbrook to offer pensioner interest-only loans
A report suggests Shawbrook plans to launch an interest-only loan for pensioners in a bid to ‘reboot’ the interest-only market.

A Telegraph report lays out the bank’s plans to reinvigorate the interest-only market after a regulatory crackdown brought the number of outstanding loans down to 1.9m from 2.5m in 2012.

Challenger bank Shawbrook has tried to focus on niche markets which the big banks deem too small or too risky to serve. Its product focus to date as a savings bank has been broadly commercial lending, specialist buy-to-let secured loans and short-term finance.

The bank has achieved a return on equity of more than 25pc even as much bigger banks struggle to get above 10% and said this product should also create strong returns.

Shawbrook was one of a wave of challenger banks to float on the stock market last year, including Virgin Money and Aldermore.

“We are planning to offer mortgages for customers who are coming into retirement and seeking to extend their interest only mortgages. It is an underserved market and one where we see good opportunities to invest,” said chief executive Steve Pateman.

“We see good opportunities to continue to grow our SME and consumer facing businesses to complement our property businesses.”

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