Saffron introduces improved Retirement Interest Only (RIO) Mortgage range

12 August 2019

NEW Fixed rates, reduced rates and lower fees

With an 88% growth in households headed by someone aged 65 predicted by 2041* Saffron Building Society is developing its specialist mortgage range for retirees to accommodate the increased demand already being seen from brokers servicing this sector.

Saffron’s latest addition to its Retirement Interest Only (RIO) mortgage products includes new fixed rates options; reduced rates on existing RIO mortgages and lower fees across the RIO range. The introduction of these latest improvements gives retired customers further opportunity to stay in their homes for longer, or to unlock the value of their properties freeing up cash to enable wider lifestyle opportunities.

3.14% 3 Year Discount Retirement Interest Only Mortgage POA
3.44% 3 Year Discount Retirement Interest Only Mortgage
3.37% fixed until 31.01.2023 Retirement Interest Only Mortgage POA
3.67% fixed until 31.01.2023 Retirement Interest Only Mortgage

Key Features

3.14% ((SVR-2.5%) to 50% LTV – requires a Power of Attorney (POA) to be in place for applicant
3.44% (SVR-2.2%) to 50% LTV
Arrangement fee: £499
Early Repayment Fee: 3% for 3 years
Overpayments: 20% penalty free per annum
Loan: Min loan £30K, Max loan £1M
Repayment: Interest only
Purpose: Purchase or re-mortgage

3.37% to 50% LTV – requires a Power of Attorney (POA) to be in place for applicant
3.67% to 50% LTV
Arrangement fee: £999
Early Repayment Fee: 3% for 3 years
Overpayments: 20% penalty free per annum
Loan: Min loan £30K, Max loan £1M
Repayment: Interest only
Purpose: Purchase or re-mortgage

Who would a RIO Mortgage appeal to?

The RIO products will appeal to different market segments depending on their needs:

The mortgage allows borrowers to protect the equity in their home and/or release equity to support their lifestyle such as looking after family members, residential care or home improvements.
People with an interest only mortgage, who have a repayment vehicle in place, can choose to use their capital for other purposes.
Borrowers with an interest only mortgage, who do not have a repayment vehicle, can use this product to stay in their property for longer.

To help Brokers identify potential customers, Saffron have provided some hypothetical examples to illustrate the types of customers that could benefit from the RIO product.

Anita Arch, Head of Mortgage Sales at Saffron Building Society said: “We continually review the market to see where new opportunities are emerging for our broker partners. The retirement sector is definitely one area to keep an eye on in terms of new selling opportunities – as such we have redefined our RIO mortgage range to accommodate the increasing demand in this specialist area.

Many consumers don’t think it’s possible to obtain a mortgage in retirement let alone get one that can help fund a lifestyle. People are living longer and are expecting to maintain a certain standard of living during this time. One of the key benefits associated with our RIO products is the opportunity for customers to utilise the capital linked to homeownership providing a popular way for them to finance living in later life.

We will be pleased to speak with our broker partners to outline in more detail the growth opportunities in the retirement mortgage market.”

Full product details can be found here and you can easily submit a case via our online broker portal.

If you have any questions please speak with our Business Development Mangers, who will be happy to help: Gemma Reynolds: 01799 582925; Holly Andrews: 01799 582885