Who’s right for RIO?
A mortgage that works for a range of retirement clients
A Retirement Interest Only mortgage is designed to meet a number of important needs in retirement. That could be anything from planning lifestyle choices to simply continue making mortgage payments...
1. Retirement planners
These clients are looking to fund lifestyle choices and retirement planning. On top of that, they want to protect equity in their home and leave an inheritance for loved ones. Whether they continue borrowing or take out a new loan, RIO can help with anything from home improvements to financial planning.
2. Equity releasers
Besides releasing money tied up in their homes, these clients want to protect their equity and leave an inheritance for loved ones. They may still be working but can use RIO as a way to free up equity pre-retirement to fund a holiday home or give children and grandchildren a helping hand on the property ladder.
3. Existing interest only customers
RIO can also prove really useful for those clients who have come to the end of existing interest only mortgages and are unable to repay the capital balance. They are, however, able to continue paying interest for the life of the mortgage.
A quick note on lifetime affordability
It’s important for all your clients to be able to make interest only payments for the life of the mortgage, as RIO doesn’t allow interest roll up. Income assessment is based around current income and future income in retirement, including transferable benefits. Repayment is triggered by a life event, such as a client’s death or need for long term residential care. For more details around repayment, please ask your BDM who will be happy to help.
How does RIO compare with other types of mortgage?
RIO is different to both a standard Interest Only mortgage and a Lifetime Equity Release mortgage, and should therefore not be considered as a replacement but as an alternative product offering. It’s also important to note that the FCA classes RIO as a standard mortgage and not a Lifetime Equity Release mortgage.