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AToM bridges gap in retirement market with an interest-only deal

The launch of an interest-only mortgage for retired borrowers by All Types of Mortgages has been welcomed in the over 65s market.

Last week AToM launched a mortgage from an unnamed mutual aimed at home owners aged over 65 who have equity of at least £150,000.

The product is available up to a maximum LTV of 40% on an interest-only basis and has a variable rate of 5.74% tied to the lender’s SVR for a 10-year term.

Simon Chalk, equity release planner at Bower Retirement Services, says there is a need for interest-only products in the retirement market.

He says: “There is a definitely a place in the market for AToM’s product, especially since Halifax withdrew its Retirement Home Plan last year.

“However, it is important that advisers are vigilant to all possible risks as it is a concern that the product has a variable rate and for couples, affordability would need to be stress tested in the event of one partner dying.”

Dean Mirfin, group director at Key Retirement Solutions, adds: “It is fantastic to see another option on the table for those in retirement.

“But it is always worrying for individuals on a pension income to be on a variable rate and I would want to see affordability stringently tested on an ongoing basis.”

Dale Jannels, managing director of AToM, says it is common for mutuals to offer variable rates, while affordability in the event of death should not be a problem if the broker has arranged joint life cover.

He adds: “We believe we have come up with an ideal solution for a gap in this market.

“The phone has not stopped ringing since we launched the product and the lender has given us plenty of funding for it.”


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