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Who Offers Retirement Interest Only Mortgages?

Several high street banks and other specialist retirement lenders offer retirement interest only mortgages to customers over the age of 55 who meet the criteria and pass affordability checks.

Retirement interest only (RIO) mortgages are offered by: 

  1. High street mortgage lenders, some have a range for later life borrowers in which they’ll have a RIO product.
  2. Specialist later life lenders, there are some lenders that specialise in the age 50+ market and offer a range or RIO and equity release mortgage products.  

Seeking mortgage advice from an independent broker will give you peace of mind that a retirement interest only mortgage is the right product for you and that other cheaper alternatives have been explored and discounted.

Retirement Interest Only Mortgages Explained

A retirement interest only mortgage will likely prove more expensive than a regular interest-only mortgage over the same period so it’s worth exploring your options with traditional mortgages first.  Also, with traditional mortgages, there are 100’s of lenders who offer these, so the competition is greater which drives down the rates.

Unlike traditional mortgages, the interest rate on a retirement interest only mortgage will run for life, therefore, it’s important to discuss any foreseeable future changes in your situation with your advisor so that they can factor these into the advice and recommendation.

Due to the lifetime interest rate, seeking trusted independent mortgage advice could save you a lot of money and time over the term of the mortgage.  Mistakes can prove costly with mortgages, therefore, it’s always best to have experience and knowledge by your side to minimise your chances of anything going wrong and pace of mind that you have consumer protection.

The application process for a retirement interest only mortgage is very similar to a traditional mortgage, income, both current and future, and expenditure will be considered, along with credit score and property type.

You’ll need to provide bank statements, pension projections, identification, and any other ad-hoc documentation that is requested by your lender to see if you qualify for a mortgage offer.

Finding the best Retirement Interest Only Mortgage Deal

Retirement interest only mortgages are offered as a range age 50+ mortgage solutions for purchasing a new home, remortgaging, repaying an existing mortgage, and releasing equity for one reason or another.

Retirement interest only mortgages work well where you, or both applicants if it’s a joint application, have a good level of income in retirement such as from private pensions.  Unlike a traditional lifetime mortgage, with a retirement interest only mortgage, you’ll need to pay a monthly mortgage payment every month.

A retirement interest only mortgage is repaid on death or entering long term care, or when the second applicant, if a joint application, enters long term care or dies.

A great deal of flexibility can be offered with a retirement interest only mortgage, your mortgage broker will ensure that any features and benefits are matched to your personal situation to meet you current and any foreseeable future needs such as moving home to downsize.  

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