More and More People are Switching their Mortgages to a Spry Lifetime Loan

In the first six months of 2024 we’ve seen a 40% increase in the value of our lifetime loan offers compared to the same period of time last year. To put some figures on it – we averaged €1.4 million each month from January to June this year against €1m a month in the first half of 2023.

According to statistics released by the Central Bank in June¹ – numbers from all the lenders in the Irish market – there was much more mortgage switching to what they call non-bank lenders (which is us), rather than to the traditional bank lenders.

The Banking Payments Federation of Ireland (BPFI – the organisation comprising all the traditional banks) reported a 53% decrease in mortgage switching to traditional lenders in the first three months 2024².

It must be said that the overall volume of switchers reported by the Central Bank is small – but still, it demonstrates an increasing awareness and recognition of our products and the choice they offer to over-60 homeowners. Simply put, there is a growing demand for mortgage switching options for older people which is not being met by the mainstream banks.

The increase in the number of customers who are switching from a traditional mortgage to a Spry Lifetime Loan is a trend we’ve seen for almost two years now and given the growing number of Irish homeowners carrying their mortgage into retirement, we expect it to continue.

Benefits of a lifetime loan - a loan against property

Very often, people are are retiring on reduced incomes and they are looking for certainty about their repayments. Mortgage affordability can be a worry and a lifetime loan may suit their financial needs better because there are no monthly repayments required (although many of our customers choose to make optional repayments to help manage the loan balance).

Brendan Burgess, the founder of AskAboutMoney.com, had this to say in a recent thread³ about options for someone approaching retirement who still has a mortgage.

“A lifetime loan from Spry Finance – I am surprised that more people don’t know about this option. It’s a great product for older people who still have a balance on their mortgage after the term has expired or who want to switch from a vulture fund which is crucifying them with very high interest rates.”

Qualified Financial Advisor Micheal Dowling of Dowling Financial said older mortgage holders often have few options when it comes to switching.

“Many older borrowers are coming from credit servicing companies and have been on high variable interest rates. They are looking for switching options but the banks aren’t giving them any – because of age, the relatively small size of the loan, credit history or missed repayments in the past.

“One in four adults in Ireland is over sixty⁴ and an increasing number have mortgages that are following them into retirement (58,000 homes are owned by over 60s with a mortgage). When it comes to switching their mortgages to reduce their repayments, they’re faced with the same problems that confront all over 60s when they’re looking to raise funds – the traditional banks don’t cater for them.

“At that point they’re left with limited choices – try to make ends meet on a reduced income, sell up and downsize, borrow money from friends or family or rent out a spare room – none of which may be very appealing. Spry Finance and their equity release product portfolio offer a real choice for some of these customers, one which is not being widely communicated either by banks or the credit servicers.”

[1] https://www.centralbank.ie/docs/default-source/publications/financial-stability-notes/mortgage-switching-statistics-fs-note.pdf?sfvrsn=27f2601a_7 (Figure 3)
[2] https://bpfi.ie/publications/bpfi-mortgage-drawdowns-q1-2024/
[3] https://www.askaboutmoney.com/threads/what-are-the-options-for-someone-approaching-retirement-who-still-has-a-mortgage.236581/#post-1885815
[4] https://www.ageaction.ie/reframing-ageing-state-ageing-ireland-2022-1#:~:text=People%20aged%2060%20or%20older%20represent%20one%20in%20four%20adults,people%20aged%2090%20or%20older