Retirement Interest Only Mortgage (RIO)
This is simply a mortgage where you just pay the interest on the money you owe and paying the interest is compulsory. It is available to people over 55 and the funds can be used to repay an existing mortgage or for any legal purpose such as a new kitchen or bathroom, home improvements, a car, clearing debts, holidays or gifting to family for example.
How does it work?
Essentially, a retirement interest only (RIO) mortgage works in the same way as a standard interest only mortgage where you pay the interest on the loan each month. This means the debt remains the same throughout the term.
With a RIO, affordability is calculated on income in retirement and there is no set end to the term. For a sole applicant, your mortgage would end when it is fully repaid, or when the person either passes away or moves into permanent care. The property is then sold and the lender is repaid. For joint applicants, the loan ends on full repayment, or when the last surviving borrower either passes away or moves into permanent care.
For joint applications, a lender will assess affordability on both incomes but they will also check that each applicant can afford the mortgage on whatever their sole retirement income will be so this is something to be aware of.
An Equity Release plan will reduce the value of your estate and will not be suitable for everyone and may affect your entitlement to state benefits.
We normally charge a fee for equity release advice, however this will be dependent on your circumstances. There is no fee for an initial consultation and any fee payable will be explained in full prior to application.
To understand the features and risks please ask for a personalised illustration.
