Later Life

Nationwide trials retirement interest-only mortgage

Rozi Jones
|
22nd November 2018
Natiownide
"We have committed to invest an additional £1.3 billion over the next five years to transform our technology estate and capabilities. "

Nationwide has confirmed that it is testing a retirement interest-only mortgage alongside its existing equity release mortgage.

A number of lenders have introduced retirement interest-only to their ranges after the FCA reintroduced the product earlier this year.

In the Society's interim results, it announced that total gross mortgage lending rose to £17.3bn in H1 2018 compared to £16.7bn in the previous year.

Additionally, Nationwide said it plans to invest an additional £1.3bn in technology over the next five years.

As a result of this investment, alongside asset write-offs, overall profits fell 17% to £516m in the first half of the year.

Joe Garner, chief executive at Nationwide Building Society, said: "We have committed to invest an additional £1.3 billion over the next five years to transform our technology estate and capabilities. This will take our total investment over the next five years to £4.1 billion and will ensure the Society makes the most of the opportunities ahead. We will develop new propositions, further enhance our service, simplify our operations and build new skills for the future.

“Our first half profits were lower than last year because we have chosen to increase our investment in the future of our Society. As a mutual, we do not judge our success by profit growth alone, but by how we manage our profits to serve our members’ interests."

Mark Rennison, chief financial officer, added: As a building society we do not aim to maximise profit and our decision to increase investment was in the full knowledge that it would impact on our profitability. If we exclude the charge we’ve recognised for asset write-offs and incremental technology spend, profits are in line with last year and we have held costs flat while servicing rising business volumes.

“As a mutual we take decisions on rates that are in the long-term interests of our membership, rather than pursuing short-term gain. We anticipate this, and the competitive market, will lead to further pressure on margins in the second half of the year."

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