Retirement Interest Only Mortgages (RIO)
Retirement Interest Only mortgages are available for borrowers aged 55 and over who may wish to release capital from their home, purchase a new home or for borrowers who already have a mortgage but would like to switch to a Retirement Interest Only mortgage.
They can also be used for people who do not yet want to repay their mortgage.
Many of these types of mortgages have no fixed term, meaning the mortgage is generally repaid when you either sell your property, move into long term care or pass away.
You will only be paying the interest on this type of mortgage. This can make a huge difference financially during retirement and you also have the option to make capital repayments should you wish to reduce the mortgage balance over time.
Some of the Key Benefits to a Retirement Interest Only Mortgage are:
Similar mortgage options to a normal residential mortgage such as the ability to make overpayments, move the mortgage to a new property, and a full range of mortgage options such as fixed rate and variable rate mortgages
The mortgage payments are usually lower than a repayment mortgage
They can be used to release funds from your home if required. The reasons for doing this are varied but some people may release funds for home improvements, holidays, or gifting money to family members
It removes the stress of having to repay the mortgage in retirement
You can continue to stay in your home without the need to sell in order to repay your mortgage
These mortgages can be a good option for those needing to borrow in retirement, but especially for borrowers who do not have any way of repaying their current interest only mortgage.