Retirement Interest Only
Control Your Debt with an RIO Mortgage
An Alternative to Equity Release (Lifetime Mortgage)
Retirement interest only (RIO) mortgages allow you to borrow against your home while making monthly interest payments. This prevents the loan from growing over time and can be more cost-effective than lifetime mortgages for those with sufficient retirement income.
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How Retirement Interest Only Mortgages Work
With an RIO mortgage, you pay monthly interest on the loan amount, keeping the debt level constant. The capital is only repaid when the property is eventually sold. This repayment method gives you more control over the total amount owed compared to lifetime mortgages, where interest accrues.
A Lifetime Mortgage is not suitable for everyone and may affect your entitlement to means tested benefits, so it is important to seek financial advice before taking any action. If you are considering releasing equity from your home, you should consider all options available before equity release.
The interest that may be accrued over the long term with a Lifetime Mortgage, may mean it is not the cheapest solution. As interest is charged on both the original loan and the interest that has been added, the amount you owe will increase over time, reducing the equity left in your home and the value of any inheritance, potentially to nothing.
Although the final decision is yours, you are encouraged to discuss your plans with your family and beneficiaries, as a Lifetime Mortgage could have an impact on any potential inheritance. We would also encourage you to invite them to join any meetings with your Financial Adviser so they can ask questions and join in the decision, as we believe it is better to discuss your decision with them before you go ahead.
Income Assessment and Suitability
Unlike lifetime mortgages, retirement interest only mortgages require affordability assessments to ensure you can maintain monthly payments throughout retirement. Jane Jackson Financial Solutions evaluates your pension income, investments, and other sources to determine suitability. Typical requirements include:
If your retirement income is sufficient and you wish to minimise debt, an RIO mortgage could be the better choice over a lifetime mortgage.
How Clients Use Their Retirement Interest Only Mortgages
Choosing a retirement interest only mortgage will depend on your situation, home, and future planning. Some of our existing clients have secured an RIO mortgage for:
Whatever you decide in later life, ensure you seek professional advice first.
Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Most Buy to Let mortgages are not regulated by the Financial Conduct Authority.
Your Best Years Are Still Ahead
Whether you’re dreaming of home improvements, family support, travel adventures, or simply peace of mind, a retirement interest only mortgage on your property could make it all possible. Discover your options today by calling 07990 836 455 to book a fee-free consultation.
Making Financial Decisions Responsibly
Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
A lifetime mortgage is not suitable for everyone, and it is important to seek financial advice before taking any action. All other options available should be explored before choosing equity release.
Interest is charged on both the original loan and the interest that has been added. The amount you owe will increase over time, reducing the equity left in your home, potentially to nothing. Please discuss with your family and beneficiaries.
