Retirement Interest Only (RIO) mortgages are designed specifically for borrowers typically aged 55 and over, whether they are still working or have already retired. These innovative mortgage products allow mature homeowners to secure an interest-only mortgage that extends throughout their retirement years.
Unlike traditional mortgages, RIO mortgages have no fixed term. They continue until repaid from the sale of the property, the borrower’s death, or when the borrower moves into long-term care. This flexibility makes RIO mortgages an attractive option for older borrowers looking to manage their finances more effectively in retirement.
By choosing a RIO mortgage, borrowers can enjoy lower monthly payments since they only pay interest, leaving the loan principal intact. This can be especially beneficial for those on a fixed retirement income, providing financial stability and the ability to maintain their current lifestyle without the burden of hefty mortgage repayments.
RIO mortgages involves reducing the equity in home which could negatively the inheritance they might want to leave behind. It could also impact any means tested benefits or pension credit.
Customers who can be helped
End of term
Sometimes called mortgage prisoners, these customers are stuck on a high interest rate and no longer meet the outdated criteria of their existing lenders.
Bank of Mum and Dad
Customers who want to help their children or grandchildren with financial support to get on the housing ladder or pay off student loans etc.
Home improvements
Customers who want to make improvements to their existing property can free up funds with our interest-only mortgages.
Alternative to Equity Release mortgages
RIOs can provide higher levels of borrowing to applicants who can service interest-only payments & borrowers are not impacted by roll-up compounding interest.
Debt consolidation
Customers who see an opportunity to reduce existing
Purchasing a home
Borrowers over 55 who aspire to buying their dream home or second home can benefit from our human approach to underwriting.
Inheritance Tax
Customers looking to take a mortgage and then use/gift the proceeds to reduce the amount of family tax that might be due in the future.
Flexible lending approach to income
Employment income, self-employment income, pensions, investments, rental, and other assets can be considered for affordability assessment.
THINK CAREFULLY BEFORE SECURING ANY OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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