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Yes, if it’s affordable for you and you pass the criteria then you can get an interest only mortgage past retirement.
There are 3 main types of interest only mortgages:
- Traditional interest only mortgages.
- Buy to let mortgages.
- Retirement interests only mortgages (Age 55+).
Here we’ll explore the 3 types of interest only mortgages going past retirement age.
Type 1 – Traditional Interest Only Mortgages
These are a good high-risk lending solution for affluent customers who have a plan in place to repay the loan such as from a private pension lump sum, an investment maturing, or sale of an asset past retirement.
Here are some key characteristics of an interest only mortgage customer.
- A big deposit, typically 30%+, the bigger your deposit is the less risk you are to the lender.
- High earners, typically £75k+ per annum from employment, pensions, investments etc.
- Good credit history.
- Investments such as bonds, property, and shares that will be used to repay the loan.
- Private pensions in the background.
- Asset rich.
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Type 2 – Buy to Let Mortgages
Buy to let mortgages are assessed in a different way than traditional mortgages and it’s normal for an experienced landlord to have a buy to let interest only mortgage going past retirement.
With a buy to let, the monthly mortgage payment is made from the rental income received and the mortgage is usually repaid from the sale of the property in the future.
Type 3 – Retirement Interest Only Mortgages
Often called a RIO, retirement interest only mortgages are available to customers over the age of 55 that have enough income to pay a monthly mortgage payment. There is no term, a RIO mortgage runs for your lifetime and can be in joint or sole names.
You’ll need to pass affordability checks similar than with a traditional mortgage, prove your current and future income can sustain the monthly interest payment, and meet lending criteria to qualify.
A RIO mortgage is usually repaid from the sale of the property when you or your surviving partner dies or goes into long term care, or from a remortgage to a lifetime mortgage product in your later years.
Mortgage Advice for Past Retirement Mortgages
Interest only mortgages that run past your retirement date are classed as specialist lending products therefore, seeking trusted independent mortgage advice will prove invaluable.
Mistakes can be costly and there may be better alternative products suitable for your needs.
