Correct at 31/03/2020
If you’re approaching retirement, or are already retired and looking for a mortgage, L&C can help you decide whether a retirement interest-only (RIO) mortgage could be the right option for you.
Demand for retirement interest-only mortgages has grown in recent years, and there is now a much wider range of options to choose from. At L&C we can compare the best retirement interest-only mortgages on your behalf and explain which deals you’re likely to be eligible for. Once we’ve found the right mortgage deal for you, we’ll guide you through the application process from start to finish.
Or call one of our expert advisers today on:
A retirement interest-only mortgage works in a similar way to a standard interest-only mortgage in so far as repaying the interest every month, but there are some key differences. The mortgage usually has no end date and no age restriction, and the capital borrowed is only paid off when the property’s sold, typically when you move into long term care or die.
As you only pay interest each month, payments are lower than if you were to repay some of the capital plus the interest. Having a retirement interest-only mortgage can provide you with greater financial flexibility, as it means you don’t have to worry about finding a lump sum to pay back your mortgage capital. However, this capital still needs to be repaid when your property is sold, which could reduce the value of any inheritance you might want to leave.
Retirement interest-only mortgages are not the same as lifetime mortgages, which are a type of equity release scheme. With equity release, no monthly payments are made, so interest rolls up over time and must be repaid, along with the capital borrowed, when you die or move into long term care.
If you want to discuss the retirement interest-only mortgage options that might be available to you, get in touch with L&C today. Our expert advisers can help you compare rates and find you the best deal to suit your needs.
This type of mortgage allows older homeowners to make monthly interest mortgage payments until they die or go into long-term care. The capital is repaid to the lender when the property is sold.
Most lenders that offer retirement interest-only mortgages are building societies. L&C can help you compare all the deals available to you.
You’ll need a good credit history and plenty of equity in your property to be eligible for a retirement interest-only mortgage. You must also be able to demonstrate that your retirement income can comfortably cover your monthly interest payments.
Choosing the right mortgage for you can be really tricky.
At L&C our expert advisers guide you through the process. Simple and efficient.
Call free from mobile or landline