Major boost for older borrowers as Nationwide throws weight behind Later Life Mortgage Lending

10 April 2019

  • Society first on high street to offer comprehensive suite of Later Life products and advice
  • Designed in response to demand from members to live their retirement of choice
  • Launched first to Nationwide mortgage members and rolled out to all in summer

Nationwide Building Society has become the first lender on the high street to offer a comprehensive package of mortgage options and advice for older borrowers.

The move is geared towards supporting those in and approaching retirement; with the Society launching a new suite of three Later Life mortgage products coupled with dedicated advice for those aged 55 and above. It is aimed at addressing the needs of an ageing population by bridging the gap in the market for later life borrowing options, enabling them to live their retirement of choice. These will be accessed directly through Nationwide via a team of specialist Later Life mortgage consultants.

The revised and enhanced Later Life lending products have come 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. For a growing number of people, having the ability to access the value in their home provides them with much greater choice in making important financial decisions, such as making the necessary improvements and adaptations to their homes to make them suitable.

According to recent Nationwide research commissioned to examine the issues facing those approaching retirement, those in middle age have an average of £125,350 equity currently in their home.

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.

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) product and a Nationwide Lifetime Mortgage for older borrowers. Accessed with the help of specialist Nationwide Later Life mortgage consultants, the advice process allows for a simultaneous eligibility assessment on the suite of products.

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.

Nationwide is the first major lender to enter the Retirement Interest Only (RIO) market, following the FCA mortgage rule changes last year. Rates start from 2.74% for tracker products with no fees, while the market-leading 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 3.40%.

Jason Hurwood, Nationwide’s Director of Home Propositions, said: “We have seen growing demand from people wishing to release the value tied up in their home, particularly to support them being able to live the retirement they want to live. The Nationwide 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.”

Nationwide has long looked to offer its members a range of options for later life lending, and in 2016 increased its maximum age for those borrowing in retirement from 75 to 85, in a move that formed part of its ongoing plan to bring more flexibility to older borrowers. The Society has since launched a Lifetime Mortgage and also trialled a Retirement Interest Only offering, following changes to the regulatory framework that Nationwide had supported.

This move now brings the new products together under a single umbrella, accessed directly through Nationwide Later Life mortgage consultants.

Notes to Editor:

Research: www.nationwide.co.uk/about/media-centre-and-specialist-areas/media-centre/press-releases/archive/2019/03/05-later-life

The products are as follows:

Retirement Capital & Interest (RC&I)

  • Standard capital and interest repayment mortgage
  • Applicants must be over 55 (both if joint)
  • Must apply before 85th birthday
  • Available to existing Nationwide mortgage members only
  • Must be in receipt of a pension (occupational, annuities, state pension, pension credits or war disablement pension)
  • Maximum LTV of 50 per cent
  • No product or valuation fees or advice fees
  • Can borrow for number of reasons including debt con, gifting, holidays, home improvements

Retirement Interest Only

  • Interest only mortgage – loan usually repaid by sale of property after borrower(s) move into long term care or die (loan must be redeemed within 12 months of these events)
  • Interest only mortgage – loan usually repaid by sale of property after borrower(s) move into long term care or die (loan must be redeemed within 12 months of these events)
  • Applicants must be over 55 (both if joint)
  • Must apply before 85th birthday
  • Available to existing Nationwide mortgage members only
  • Must be in receipt of a pension (occupational, annuities, state pension, pension credits or war disablement pension)
  • Maximum LTV of 50%
  • No product or valuation fees or advice fees
  • Can borrow for number of reasons including debt con, gifting, holidays, home improvement

Lifetime Mortgage

  • Equity release mortgage – loan usually repaid by sale of property after borrower(s) move into long term care or die (loan must be redeemed within 12 months of these events)
  • No contractual payments, but member can make optional payments if they choose
  • Applicants must be over 55 (both if joint)
  • Must apply before 85th birthday
  • Available to existing Nationwide mortgage members only
  • Maximum borrowing is dependent on LTV and age of application
  • No product or valuation fees or advice fees
  • Fixed rate for life
  • No negative equity guarantee
  • Can borrow for number of reasons including debt con, gifting, holidays, home improvements

About Nationwide

Nationwide is the world's largest building society as well as one of the largest savings providers and a top-three provider of mortgages in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million customers.

Customers can manage their finances in a branch, via the mobile app, on the telephone, internet and post. The Society has around 18,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.

Please note: If you are a customer looking for information on our products and services, please visit the main website.