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
Many households are still being affected by the high cost of living, with several people worrying about how they can make ends meet on a monthly-basis. Unfortunately, the cost of bills including, water, council tax, and energy are still rising. Here are some things you can do.
The Renters’ Rights Bill represents a significant milestone designed to enhance the rights and protections of tenants in the rental market. This comprehensive bill aims to foster a more balanced and fair rental sector, ensuring that tenants can enjoy greater security and equitable treatment. It is likely to become law in late 2025.
Limited Company vs Single Name Buy to Let
14 days ago
Owning a buy-to-let property in your sole name versus through a limited company each has its own set of advantages and disadvantages.
Top 10 property price hotspots in 2024
20 days ago
Data from Rightmove shows that Sunbury-on-Thames in Surrey was the number one house price hotspot in 2024. The prices in this area climbed an impressive 12.5% - increasing from an average price of £527,005 in 2023 to £592,926 in 2024.
Buy to Let Stamp Duty Changes April 2025
23 days ago
On the 31st October 2024 stamp duty for those purchasing additional properties increased by 2% from 3% to 5%.
From 1st April 2025 the threshold will be reducing from £250,000 to £125,000
Where did Londoners move to in 2024?
28 days ago
Research from Metro shows that those who chose to move home didn’t actually move that far away. With a 430g pack of chicken costing on average almost double in London than the rest of the UK, it's no wonder some people are choosing a change of scenery to save a few pennies.
Reasons to get a Buy to Let Mortgage
20 Jan 2025
Following recent changes in the Buy to Let market, some investors may find this product less appealing. However, if done correctly, building a buy to let portfolio can be very profitable.
Stamp duty: how is it changing in 2025?
7 Jan 2025
Helping you understand the upcoming changes in stamp duty (SDLT) from April 2025.
More information
Trusted by
