Standard and RIO Mortgage

If you’re 55 or older and looking for a new mortgage, there are a range of options to consider

Standard Mortgage

• Fixed term mortgage  – take comfort in knowing it will be paid off at the end of the term
• A range of options available,  you might want to pay a part off the loan each month so it’s fully repaid by the end, or choose to pay only interest each month and you then repay the amount you’ve borrowed at the end of the agreed term 
• You will need to be able to show you can afford to make the monthly repayments from your earned income or pension for the full term 

More information on your options:

• Repayment mortgage. Monthly payments are calculated so the mortgage is repaid at the end of the term
• The longer the term, the lower the monthly payment. However, it will take you longer to pay off the loan so you will pay more interest, costing you more over the mortgage term.
• Interest-only mortgage. The length of the term makes no difference to the monthly payments because these are only paying off the interest charges and not the loan itself. You will need to consider how you pay off the loan at the end of the agreed term, for example, an investment portfolio or selling a second property

I’m ready. What happens next?

For more information about our range of mortgages.

Retirement Interest Only (RIO)

• Pay interest only. Borrow against your property but only pay back the interest each month – not the loan itself, meaning the amount you owe won’t increase over time
• You’ll only be paying off the interest, so your payments may be lower than a typical mortgage

What you need to know:

• Unlike a Repayment Mortgage, there is no fixed end date to repay the balance
• You’ll only pay off the interest for now, so your payments may be lower
• You’ll need to continue to pay the interest each month until the loan is repaid, which could be much longer than a normal mortgage
• The loan is repaid when you (or the last remaining applicant) either passes away or moves into long term residential care

What next?

We do not currently give advice on Retirement Interest Only mortgages but you can find a qualified adviser to help you at the Money Advice Service. Your financial adviser will help you understand if RIO is right for you.

Your feedback is important to us.

Some of the Later Life Lending product options we have detailed are currently not available through us. If any of these Later Life options sound like something you’d be interested in, why not help us understand a little more by answering a couple of quick questions?