What is a Retirement Interest-Only Mortgage?

A Retirement Interest-Only Mortgage, also known as a RIO, is a long-term loan that helps over-55 homeowners to borrow money as they approach (or are in) their retirement. 

The Royal London Later Life Lending Service is provided by Responsible Life and allows you to consider the available options.

How does a Retirement Interest-Only Mortgage work?

You may have heard of a traditional interest-only mortgage (you may have even used one to purchase your home). A RIO works in a similar way and involves the following:

  • borrowing a lump sum secured against the value of your property
  • committing to making monthly interest payments
  • the mortgage being repaid by the sale of the home when the last borrower dies or enters long term care
  • the option to fix your interest rate for a period of time.

To find out more about how Responsible Life can help you with your RIO options, book a free, no-obligation call in with their Information Team. They will be able to answer your initial questions and send you your free guide to later life lending.

Call the Information Team for free on 0800 023 9315 or schedule a call.

Schedule a call today 

How much can you borrow?

As with more traditional mortgages, there are a few things that will determine the amount that you can borrow, including the value of your property and your income. Any pensions that you receive can also be included in your income.

There will be affordability checks and other lending criteria that may also have an impact on the amount that you can borrow, so one of Responsible Life’s fully qualified mortgage advisers will be best placed to help you.

Royal London has chosen Responsible Life to provide our later life lending service.To book in your free initial appointment, call Responsible Life's Information Team on 0800 023 9315.

 

Why consider a Retirement Interest-Only Mortgage?

You still own your home and you don't have to move out

You only need to pay the interest each month, so payments can be lower than a traditional mortgage

You repay the initial amount of the loan back through the sale of your home when you die, or move into permanent residential care

It is worth considering that the eligibility criteria for a Retirement Interest-Only Mortgage can be quite strict, meaning that it won’t be suitable for everyone. For those in this situation, you might want to consider a Lifetime Mortgage. Responsible Life’s Information Team can answer your initial questions on both products and help you to understand more about them. Why not consider booking in a free no-obligation call with them today. 

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Is a RIO for you?

Borrowing money with a RIO could be the right choice for you if you:

  • are over 55
  • own your own home
  • can afford to make monthly payments to clear the interest.

As with all financial products, there is an element of risk when borrowing money. As a RIO involves making required payments to clear the interest monthly, there is a risk of repossession should you miss any. A Responsible Life adviser will be able to discuss the features and risks with you.

To apply for a Retirement Interest-Only Mortgage - RIO:

  1. Freephone 0800 023 9315 to discuss your options with the Information Team
  2. The Information Team can put you in touch with one of Responsible Life’s mortgage advisers, who will offer advice on whether a Retirement Interest-Only Mortgage could be for you
  3. If you meet the criteria and want to move forward, you can make the application.

If you take out a product recommended by Responsible Life, Royal London Marketing Limited will receive a fee for this introduction.

If you choose a mortgage with required repayments during your lifetime then your home may be repossessed if you do not keep up with the payments. A Retirement Interest-Only Mortgage may impact the value of your estate and could affect your entitlement to means tested benefits. Think carefully before securing other debts against your home.

To understand the features and risks, ask for a Personalised Illustration. Responsible Life’s adviser will talk through the setting up costs of a mortgage before you make any decision to proceed. Only if you choose to proceed and your case completes will Responsible Life charge an advice fee, currently not exceeding £1,490.

Frequently asked questions about Retirement Interest-Only Mortgages

No, there is no maximum age limit on a RIO. You simply need to be aged over 55.

The amount that you can borrow is primarily determined by your home’s value and your level of income, but there will also be an affordability assessment and other checks that will help to determine it.

Repayment of the outstanding balance is only required when the last borrower dies or enters permanent residential care. This is usually achieved with the sale of the home.

The maximum you can borrow will depend on your individual circumstances and the lenders criteria.

Yes, there are products available with interest rates that are fixed for life. There will also be options that allow you to fix the rate for shorter periods of time.

Yes, as you are committing to making monthly payments, there is a risk of losing your home if you do not keep up with them.

No, there is no maximum age limit on a RIO. You simply need to be aged over 55.

The amount that you can borrow is primarily determined by your home’s value and your level of income, but there will also be an affordability assessment and other checks that will help to determine it.

Repayment of the outstanding balance is only required when the last borrower dies or enters permanent residential care. This is usually achieved with the sale of the home.

The maximum you can borrow will depend on your individual circumstances and the lenders criteria.

Yes, there are products available with interest rates that are fixed for life. There will also be options that allow you to fix the rate for shorter periods of time.

Yes, as you are committing to making monthly payments, there is a risk of losing your home if you do not keep up with them.

Got a question about Retirement Interest-Only Mortgages? The Responsible Life team are here to help.

0800 023 9315

Free from UK landlines and mobiles

Mon to Fri: 9am-8pm. Sat: 9am-5pm.

Royal London have chosen Responsible Life to provide our customers with advice on Later Life Lending products. The Royal London Mutual Insurance Society Limited has a 30% shareholding in Responsible Life and Responsible Lending (Responsible Group) and are part of the same group under FCA disclosure rules.

Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (https://register.fca.org.uk/) under reference 610205.

If you take out a product recommended by Responsible Life, Royal London Marketing Limited will receive a fee, for this introduction. If you would like further details about this fee, Responsible Life will be able to provide you with this. More information about Responsible Life and how your information is processed is available on their privacy notice. Find out how Royal London manages your personal data.

Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority, registration number 302391. Registered in England and Wales number 4414137.

Responsible Life's registered office is: Mills Bakery, Royal William Yard, Plymouth, PL1 3GE. Registered in England & Wales. Company number 7162252.