Our Retirement Interest Only Mortgage Advisor, Paul Clifford, often visits clients in Tunbridge Wells and across Kent. Below, we discuss what Retirement Interest Only Mortgages are, how they work and other options available to the over 55s. Please do get in touch for a free no obligation consultation with Clifford Osborne IFA.

What are RIO Mortgages?

If you’re aged 55 and over, a Retirement Interest Only Mortgage (RIOs) or Equity Release Interest Only Lifetime Mortgage could be an option for you.

Retirement Interest Only Mortgages can be beneficial to those who find themselves unable to pay off their mortgage by the time they retire. The reasons that these options are taken out can often include helping homeowners to avoid having to sell their home to pay outstanding mortgages, making day to day living more comfortable or releasing equity from their home to enhance their lifestyle.

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.

Having lower monthly payments allows you to retain more cash to fund your lifestyle, pass on to family or for emergency use. 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 do Retirement Interest Only Mortgages work?

• You only pay the interest on the outstanding balance on a Retirement Interest Only Mortgage. 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, 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.

Whether you’re looking into equity release lifetime mortgage or retirement interest only mortgage, it is always highly recommended to seek professional advice. It’s important to speak to an Interest Only Mortgage advisor who is regulated, independent and a member of the Equity Release Council and Financial Conduct Authority authorised.

Paul Clifford at Clifford Osborne is a Chartered Financial Planner and Equity Release and Lifetime Mortgage Specialist. He is based in the South East, visiting clients across Kent including Tunbridge Wells. He always offers a free no obligation initial consultant – get in touch today to book yours.

Options available to those aged over 55

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 Retirement Interest Only Mortgage Advisor in Kent?

• We always offer a free no obligation initial meeting to discuss Retirement Interest Only Mortgages. Contact us to book yours
• As Independent Financial Advisers (IFA), we offer clients a truly independent advice service
• We put your needs first. We’ll provide a personalised plan and recommendations based on your circumstances, needs and plans for the future.
• We’re here to help. We’ll be by your side each step of the way; research, recommendation, decision, application and ongoing support. We’ll explain things clearly in plain English and avoid jargon.
• You’ll have peace of mind. We are regulated by the Financial Conduct Authority and a member of the Equity Release Council. We’ll help you safely make the most of your money.
• We’re a Top Rated Advisor on VouchedFor, with many reviews from clients. Read them here.
• Paul Clifford has 18+ years experience in mortgage and financial services. Learn more about us

Our retirement advice service will help you tackle retirement with confidence. It all starts with a chat, so please call us for a free conversation, with no obligation. This initial chat can occur over video call, at your home or offices in Tunbridge Wells or elsewhere in Kent, or at our offices. We look forward to hearing from you.

To understand the features and risk, ask for ac personalised illustration. Think very carefully before securing other debts against your home.