As previously mentioned, retirement interest-only mortgages are designed for those who are approaching retirement. This type of mortgage can be an option if, for example, you have an interest-only mortgage and are worried about how you’ll repay the capital you owe when your mortgage finishes.
Rather than your mortgage finishing on a specific date, a RIO mortgage enables you to carry on making interest payments indefinitely so that you’re able to stay in your home without having to pay back the capital owed. The capital only has to be repaid when you die or move into long-term care and the property is sold.
Bear in mind that like any other kind of mortgage, if you don’t keep up with your monthly payments, there is still the risk of repossession. One of the main benefits of this type of mortgage is that as you’re only repaying interest and not any of the capital back, your monthly payments will usually be relatively low, and it should be easier to prove you can afford them. The downside, of course, is that the mortgage capital needs to be paid back when you die or go into long-term care, so you won’t be able to leave as much of an inheritance as perhaps you might have liked.
Lenders offering retirement interest-only mortgages are often building societies and include Leeds Building Society, Nottingham Building Society, Nationwide Building Society and Bath Building Society. There’s no minimum age requirement, but they are typically aimed at older homeowners in their 50s or 60s who are likely to find them easier to qualify for than a standard interest-only mortgage.
There are a number of RIO mortgage brokers available in the market, but if you’re looking for somewhere to start, we’ve partnered with experienced mortgage advisor, Teddy Cenaj, to offer high quality retirement interest-only mortgages advice and research the various options that might be available to you. Rest Less members can book a free, no obligation initial consultation here* or call Teddy on 020 7153 6011*. There are no advice fees or charges for standard or buy-to-let mortgages, however a fee of £295 is payable if you do end up wishing to progress with an application for a Retirement Interest-Only Mortgage.