Retirement Interest Only (RIO), is available to borrowers over the age of 55 at the outset of the mortgage term, up to a maximum LTV of 50%. Borrowers are required to meet the Society’s affordability requirements and be able to clearly demonstrate ongoing affordability of the loan, on a stressed basis, in the event of either party to the mortgage dying during the mortgage term. Personal pension income, state pension income, investment income and rental income are acceptable.
Borrowers who are seeking to capital raise must be directed to a taxation and benefits expert to ensure that a RIO mortgage does not impact any means tested benefits.
The Society does not place any additional restrictions upon who can reside in the property, standard conditions apply. Occupiers over the age of 17 should be declared at the point of application and will be required to complete an Occupiers Consent Form.
Whilst the Society may specify a term at the outset, repayment of the capital will not become due until the occurrence of one or more of the specific life events and while the customer continues to occupy the mortgaged property as their main residence, although interest payments will become due, no full or partial repayment of the capital is due or capable of becoming due. These life events include:
- Death of sole or surviving joint borrower
- Entry into a long-term care facility of the sole or surviving joint borrower, where the borrower will not be returning to reside within the property
The borrower is required to receive legal advice as a condition of the mortgage; and is strongly recommended to register a lasting power of attorney to mitigate the risks associated with managing financial affairs in the event of cognitive decline.