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Until recently, older borrowers seeking a mortgage beyond retirement age had limited options, with equity release type arrangements often being the main type of product available. In recent times however, some lenders have begun to make available a wider range of options and it is now potentially possible to take out a conventional mortgage into old age - well beyond normal retirement age.
There are numerous scenarios that may apply to older borrowers. You may be approaching the end of your existing mortgage term but have a balance remaining, and want to obtain a new deal; you may want to raise money from your property to assist children or grandchildren with a property purchase of their own; you may want to buy your home under right to buy legislation. These are just a few examples, and there are lenders who will consider all of them.
Assisting older clients is a core activity for Maxwell Moore - speak to us and let us expertly guide you through the options available to you in this rapidly evolving market.
Retirement Interest Only (RIO)
RIO mortgages are very similar to conventional mortgages with two major differences. Firstly, the affordability assessment is done based on interest only so they are suited to older borrowers who generally have lower incomes. Secondly, there is no mortgage term or end date, and the loan is paid off when you die. However, that doesn't mean there aren't any criteria, and these vary between lenders.
- You will normally need to be 55 or older to apply for a RIO mortgage. Some lenders also have a maximum age at the time of application as well, typically 80.
- There will be a maximum amount you can borrow based on the value of your property. This is typically 60% of the value, and this can be affected by your age at time of application.
- You will need to have an income and be able to prove you can afford the interest payments until you die. This can be pension income. Some lenders have a minimum income requirement.
These are only the main facts and we recommend you get in touch with us to discuss your personal circumstances and whether this is the right mortgage for you.Insurance products may not be available or appropriate depending on your age.