What the papers said about split mortgages and older borrowers

The Financial Times reported this weekend on the increasing number of borrowers looking to split their mortgages to suit their financial circumstances.

There are various options open to those in need of a greater degree of flexibility within their mortgage. Splitting the repayment method between capital repayment and interest-only, for example, can help to ensure that some of the capital is repaid within a set time period.

Splitting a mortgage between different mortgage types – such as a fixed rate and a tracker rate – can provide a borrower with more flexibility to overpay while also having the peace of mind that a portion of the mortgage is protected from interest rate fluctuations.

Hinckley & Rugby Building Society has now added to those options, by allowing borrowers to split their loan into different mortgage terms. When parents buy with their offspring, part of the mortgage can be taken on a shorter repayment term, to reflect the different income levels and stages of their working lives.

Elsewhere the Sunday Telegraph looked at Retirement Interest Only (RIO) mortgages. This type of product has been around since 2018, when the Financial Conduct Authority relaxed rules around later life lending, making it easier for lenders to offer more options to a growing area of the market.

Experts suggested however that many borrowers are yet to take advantage of RIO mortgages, perhaps due to a lack of awareness, and availability amongst more mainstream providers. As a result, only 984 RIO loans were taken out in 2019.