As the name suggests, Retirement Interest Only (RIO) mortgages are aimed at borrowers that will be retired from their full time occupation during its term. In the past, such mortgages have been treated the same as Equity Release plans and as such, the complexity of the advice required has been significantly higher than for those taking a standard mortgage product.
Retirement Only mortgages are generally aimed at borrowers who are too old for standard mortgages and too young for Equity Release
The Financial Conduct Authority have now decided to group Retirement Interest Only mortgages with standard mortgage products which, it is hoped, will expand the products available to borrowers in this market and improve their regulation
Unlike Equity Release and Lifetime Mortgages where homeowners might part with equity in their home in return for an income or capital lump sum, Retirement Interest Only Mortgages ensure that the homeowner owns all their equity, subject only to a mortgage. As long as the borrower continues to pay the interest, the homes, and any increases in its value, remains entirely their own.
With many in ‘Generation X’ now in early retirement or or at least starting to think about it, the Retirement Only Mortgage is likely to be a popular addition to the shopping cart for the more mature homeowner. This is particularly true of homeowners that own their homes on existing Interest Only loans and who have not made sufficient provision for the repayment of the loan capital at the end of the term.
Of course, for this sort of loan to be useful, the borrower must be able to prove that they have a reliable source of income that will enable them to properly service the debt until such time as they sell their home, move into long term care - or die.
For more information on the options open to homeowners in or nearing retirement, contact our specialists at Mortgage Required in Maidenhead on 01628 507477.
Download our Free First Time Buyers Guide
Recent posts
Getting your home ready for Christmas
11 days ago
Everyone has their own traditions at Christmas time, but we have put this short blog together to help you get ready for the festive period ahead.
Budgeting Ideas for Talk Money Week
3 Nov 2023
Budgeting is an essential tool in managing finances. You can track your income and expenses, save money, and achieve goals.
Getting a mortgage when you are self-employed can be tricky, but it certainly isn’t impossible.
There isn’t such a thing as a “self-employed mortgage” - you will be applying for the same mortgages as anyone else. The main difference is you will be required to provide more evidence of a reliable income.
Stress-Busting Tips
25 Oct 2023
We have written a short blog of some stress busting ideas that you may want to put into practice, whether you're in the process of buying a property, or not, you may find these tips and techniques helpful.
Why have interest rates been increasing? when will they go down? And what does this mean for you?
We have created this short guide to provide self-care tips to support your physical and mental health.
Decorating Tips for Selling Your Property
13 Sep 2023
Selling up? It’s important to make your house as appealing as possible to potential buyers. Good decorating can help with first impressions, and increase the perceived value of your property.
More information
Trusted by
