Our retirement interest only mortgages help you borrow in later life.
The decisions you make about your mortgage are some of the most important financial choices you will ever make and retirement is no different – that’s why we’re here to support you along the way.
Our Retirement Interest Only (RIO) mortgages are designed to give you the flexibility and support you need when borrowing in later life.
Am I eligible for a RIO mortgage?
To be eligible for a RIO mortgage, you must meet the following criteria:
- Be retired
- Be over 55 years old
- The youngest applicant must be under 85 years old at the time of application
- Be able to demonstrate you can afford the monthly interest payments
Our RIO mortgages are available for joint and sole applicants, on residential properties located in England and Wales for purchase, remortgage, product switching and additional borrowing.
You'll also need to meet our affordability checks and lending criteria.
Am I eligible for a RIO mortgage?
To be eligible for a RIO mortgage, you must meet the following criteria:
- Be retired
- Be over 55 years old
- The youngest applicant must be under 85 years old at the time of application
- Be able to demonstrate you can afford the monthly interest payments
Our RIO mortgages are available for joint and sole applicants, on residential properties located in England and Wales for purchase, remortgage, product switching and additional borrowing.
You'll also need to meet our affordability checks and lending criteria.
What is a Retirement Interest Only mortgage?
A Retirement Interest Only Mortgage allows you to borrow against your property and only pay back the interest incurred on the loan each month. We offer variable and fixed interest rate RIO mortgages.
There is no fixed end date to repay the loan back.
Unlike with some other later life mortgage options, the interest isn’t added to the loan. Each month you make a payment which covers the interest of your loan – this is what will be repayable each month for the lifetime of your mortgage.
When is the mortgage repaid?
Your mortgage with The Cambridge will be repaid in full when one of the following significant life events occur:
- The homeowner(s) pass away
- When the property is sold
- Where the homeowner leaves the property for more than six months, such as moving into residential care or with family
As the interest is paid monthly the mortgage amount will not increase, giving you certainty of the amount that will need to be repaid when the mortgage ends.
When to consider a RIO mortgage?
A RIO mortgage may be worth exploring if your current interest only deal is coming to an end, and you don’t have a repayment plan in place.
It may also be suitable if you'd like to release equity from your home to:
- enrich and enjoy your retirement
- free up finances to pass onto your children or grandchildren without needing to downsize
- remain living independently in your own home for longer
- for home improvements or alterations
Things to consider before applying for a RIO mortgage?
A RIO mortgage is a significant financial decision so it’s important you read and understand the following points before applying:
The flexibility to repay your loan early
Some of our RIO mortgages allow you to make overpayments or repay your loan early without any early repayment charges (ERCs). You can overpay monthly, which will reduce the size of your loan over time, or if you prefer you can choose to repay the loan in full.
With our fixed rate RIO mortgages, ERCs may apply during the fixed rate period if you overpay more than your allowance. Please check the details of your chosen mortgage deal.
We'll waive the ERC in the event of any significant life event.
Our Mortgage Advisers will explain how each of these mortgages work and help you understand what applies to your chosen mortgage deal.
Useful resources for later life planning
To support your decision making, here are some useful resources:
Citizens Advice
Citizens Advice provides free, independent and confidential advice on legal and money matters.
HMRC
You’ll be able to find more information on how a Retirement Interest Only Mortgage may affect your benefits or pension on the HMRC website.
Lasting Power of Attorney (LPA)
An LPA is a legal document that lets you appoint one or more people (known as ‘attorneys’) to help you manage your affairs or to make decisions on your behalf if you become unable to do so.
Useful resources for later life planning
To support your decision making, here are some useful resources:
Citizens Advice
Citizens Advice provides free, independent and confidential advice on legal and money matters.
HMRC
You’ll be able to find more information on how a Retirement Interest Only Mortgage may affect your benefits or pension on the HMRC website.
Lasting Power of Attorney (LPA)
An LPA is a legal document that lets you appoint one or more people (known as ‘attorneys’) to help you manage your affairs or to make decisions on your behalf if you become unable to do so.
We’ll be here
If you have any other questions about our RIO mortgages, our Mortgage Advisers will be happy to help.
Book an appointment, email us or call us on 0345 601 3344.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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