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Retirement interest-only products double in 12 months – Moneyfacts

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  • 24/02/2020
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Retirement interest-only products double in 12 months – Moneyfacts
The market for the retirement interest-only mortgage (RIO) has expanded in the past 12 months as product numbers increased from 36 to 74 and the average interest rate fell from 3.50 per cent to 3.47 per cent.

 

Additionally, since February 2019 six new providers have entered the space bringing the total number of lenders offering a RIO to 18, analysis from Moneyfacts has found. 

The RIO got off to a slow start after the Financial Conduct Authority reclassified the product as a mainstream mortgage in March 2018. By July of the same year, there were just five products available from a choice of two providers. 

Eleanor Williams, spokesperson at Moneyfacts.co.uk, said: “Historically, many older borrowers who had retired or were shortly due to do so, found it difficult to find a new mortgage deal.  

“When the FCA reclassified RIOs as mainstream mortgages rather than equity release products in early 2018, a lifeline was thrown to many who may have previously felt trapped or not catered for.” 

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