These figures follow the release of the Autumn 2020 Market Report from the Equity Release Council.
August saw a "definite" spike in the number of RIO mortgage applications leading to a recorded rise of 11%, according to Emma Graham, business development manager at Hodge.
Graham spoke of the "slow but steady" increase in the number of applications for RIO mortgages since Hodge launched the product in 2018, however the RIO proposition has gained popularity through a greater number of people purchasing homes.
Emma Graham said: “Anecdotal evidence shows that a number of later life consumers are talking to brokers about their options and looking at the whole market, which is really encouraging.
"At Hodge, we don’t believe later life lending should be seen as a one-size-fits-all as there are many other options on the market to suit people in different circumstances, and RIO is a perfect example of that.
“Since launching this product in 2018, we have increased our offer by introducing discounted and fixed products over two, five and 10 years as well as a fixed for life basis.
"Consequently, we have seen a slow but steady increase in applications for RIO mortgages, but throughout August, there has been a definite spike in the numbers.”
“The increase is being driven by a greater number of people who are purchasing homes, with 34% of applicants taking out a RIO mortgage for a purchase in August, compared to 26% before the pandemic.
"This trend reflects a recent market wide report which saw home moves account for half of mortgage sales, compared with 35% last year and pre-COVID."
According to Hodge, the average age of a RIO applicant is 69 which is a slight fall from the average age of 72 in 2019.
Graham continued: “We have also seen a slight increase in people taking out a RIO for home improvements.
"Since the COVID-19 pandemic and lockdown, people have been spending more time at home both for home working and leisure, and so many people may be looking at ways to create permanent office spaces, as well as generally improve the quality of their homes.
"Interestingly, our figures show fewer people are using a RIO to consolidate debt.”
Emma Graham was reacting to the Autumn 2020 Market Report from the Equity Release Council, which revealed that there has been a 15% drop in new plans agreed in the first half of 2020.
