"These latest figures show a change in customer behaviour, impacted by current socio-economic pressures."
Hodge data has revealed the number of retirement interest-only (RIO) mortgage customers spending their loan funds giving family financial gifts has halved in 2023 so far.
Looking at its completion data for January to July 2023, the specialist lender found the number of RIO customers using funds raised to support family members has dropped from 14% in 2022 to just 7%.
Customers using the mortgage for debt consolidation has meanwhile increased over the same period, with a rise of 4% in the number of RIO customers using the capital for these purposes so far this year.
Emma Graham, business development director for mortgages at Hodge, said: “It’s really important for us to understand what matters to our customers so we can continue to develop our propositions to support them in the moments that matter.
“These latest figures show a change in customer behaviour, impacted by current socio-economic pressures.
“There is certainly no ‘one size fits all’ when it comes to a later life customer, with some using the product to plan for their retirement, and others looking to re-finance an existing interest only mortgage or to plan for inheritance purposes.
“RIOs may be niche, but they remain pivotal in providing a solution for a growing number of your more mature borrowers in today’s market. From what we’ve seen by staying close to customer stories, we certainly think this is the case.”
