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
Here are the lowest fixed mortgage rates of the week, available to first-time buyers, home movers, buy-to-let, and those remortgaging.
Call us for more information: 01628 507477 or email: team@mortgagerequired.com.
The UK mortgage market is seeing lenders withdraw deals and hike mortgage rates amid the escalation of conflict in Iran. This isn’t great news for borrowers, with the average rate for a two-year fixed deal sitting above 5%.
Statistics now show that those looking to purchase a property would have to save a deposit bigger than their annual gross pay.
Analysis from the Office for Budget Responsibility (OBR) shows that those looking to buy their first home could face a sharp increase if house prices follow the latest predictions, as Coventry Building Society suggests.
According to Zoopla, four in 10 homes are now cheaper to buy with a mortgage than to rent due to lower-cost mortgages - a sign that ownership is becoming more affordable.
World Sleep Day Tips
13 days ago
There are many people who struggle with getting a good night’s sleep. Having poor sleep hygiene can be the reason for bad sleep quality in adults. Sleep hygiene refers to habits that can help you sleep better.
Here we have shared some tips to create a healthier sleep.
What you need to know about remortgaging
15 days ago
If your current fixed rate is due to come to an end within the next six months, you will want to start thinking about the options available to you.
Nationwide is the first lender to allow mortgage deeds to be signed electronically and without the need for a witness.
More information
Trusted by
