Are you looking for a specialist Retirement Interest Only Mortgage advisor? Look no further. Paul Clifford at Clifford Osborne is an experienced IFA working across East Sussex. We often visit clients in Eastbourne, Brighton, Lewes, Hastings, Bexhill, Uckfield, Hailsham, Seaford, Newhaven and Crowborough. Please get in touch for a free no obligation consultation.
What are RIO Mortgages?
Retirement Interest-Only Mortgages (RIOs) and Equity Release Interest Only Lifetime Mortgages are, as their names suggests, aimed at borrowers, aged 55 and over.
The long-held expectation that people will pay back their mortgage by their planned retirement date isn’t realistic for many of today’s borrowers. Whist in previous generations individuals bought a house in their twenties or thirties and paid it off by the time they retired at 65, this is no longer the case.
Retirement Interest-Only Mortgages are part of the booming later-life market, aimed at older borrowers who find themselves unable to clear their mortgage by their planned retirement date. Equity Release and Retirement Interest Only Mortgages can help homeowners avoid having to sell the family home to repay outstanding mortgages and personal debt , release equity from their homes to enhance lifestyle, make day to day living more comfortable or simply for personal use and enjoyment.
A Retirement Interest Only Mortgage enables borrowers to take out a pure uncovered interest-only mortgage in retirement and use the eventual sale of the property to repay the debt. These mortgages can be useful if you have an interest-only mortgage as a way of keeping repayments low in retirement or as an alternative to being switched onto an expensive repayment mortgage with your existing lender.
The lower monthly payments mean you can retain more cash to fund your lifestyle, pass on to family or use for emergencies. You don’t have to worry about having a fund or savings product to repay the capital as product providers will accept the eventual sale of your property as a repayment option and you will retain ownership of your property.
How Retirement Interest Only Mortgages work
You only pay the interest on the balance outstanding on an RIO mortgage and they are very similar to standard interest-only mortgages that let you pay the interest on the loan monthly.
The outstanding capital is paid off when you die, move into long-term care, or simply choose to sell the property. RIO mortgages are portable, therefore allowing you to move home if needed or required.
Most RIO mortgages have a maximum age for when the term must end, and this is usually when the borrower reaches age 99. As with any type of mortgage, compare rates to get the best deal available for your individual circumstances.
Equity Release: Lifetime Mortgages: Retirement Interest Only Mortgages: or Home Reversions Plans are other options for older borrowers, but these loans work differently to RIO mortgages.
If you are considering taking out an equity release lifetime mortgage or retirement interest only mortgage, we would always recommend that you seek professional advice from a regulated, independent financial adviser who is a member of the Equity Release Council and Financial Conduct Authority authorised.
Paul Clifford is a Chartered Financial Planner and Equity Release and Lifetime Mortgage Specialist covering East Sussex, including Eastbourne, Hastings, Lewes, Brighton, Bexhill, Hailsham, Uckfield, Newhaven, Seaford and Crowborough. Call today for a free, no-obligation consultation.
Options available to the over 55s
Equity release – with an equity release product known as a ‘lifetime mortgage’, you borrow money against the equity in your home. The loan is completely tax-free. You can use it for most purposes (including paying off an existing mortgage). You don’t have to repay the loan until you, or the last remaining borrower, die or move permanently into long-term care.
More equity release products have become available in recent years. However, taking money out of your property will reduce the value of your estate and possibly your entitlement to means-tested benefits.
Retirement Interest-Only Mortgages (RIO) – there are now some interest-only products available specifically for the older market. With interest-only, you only pay the interest on the balance outstanding, making the monthly payments a lot more affordable.
A RIO mortgage allows you to access equity in your home via a mortgage that is paid from your pension income – allowing you to borrow responsibly into your retirement.
The mortgage can either be taken as capital repayment or interest-only. Unlike equity release loans, your debt will not increase over time, which could be a real benefit.
Retirement Interest-Only Mortgages (RIOs) have a higher maximum application age and a higher borrowing age limit. There will be limits on the amount of the property’s value you can borrow, and you will also have to pay back the outstanding capital at the end of the term.
The amount you borrow is completely tax-free and you can spend it in all sorts of ways. This includes home and lifestyle improvements, helping children buy their first property or supporting grandchildren with their education. If you give the money away, you may need to pay inheritance tax in the future.
Home Reversion Plan – a home reversion plan could allow you to sell all or part of your home in exchange for a cash lump sum and rent-free lifetime tenure in your home.
Why choose our Interest Only Mortgage Advisor in East Sussex?
- You can take advantage of our free no obligation initial meeting to discuss Retirement Interest Only Mortgages in East Sussex or our offices with Paul Clifford. Contact us to book yours
- As Independent Financial Advisers (IFA), we offer clients a truly independent advice service
- We are a member of the Equity Release Council, a body established to promote safe equity release products and protect consumers. We only recommend lenders that are also members of the Equity Release Council too.
- We’ve been a Top Rated Advisor on VouchedFor for years, with many reviews from clients. Read them here.
- Paul Clifford has 18+ years experience in mortgage and financial services. Learn more about us
We’d be delighted to hear from you. Clifford Osborne is based in Eastbourne, but we are often travelling to meet clients across East Sussex including Brighton, Lewes, Uckfield, Hastings, Bexhill, Hailsham, Crowborough, Seaford, Newhaven and further afield.
To understand the features and risk, ask for ac personalised illustration. Think very carefully before securing other debts against your home.