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Retirement Interest Only mortgages

Borrow into later life through a Retirement Interest-Only mortgage.

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You could free up some funds in retirement by taking out a Retirement Interest Only mortgage. Often known as RIO mortgages, they allow you to take out a loan against the value of your home. You then repay the interest every month, but not the capital of the loan.

The loan amount tends to be repaid when your home is sold. This could be when you pass away or move into long-term care.

As with any mortgage, the loan will be secured against your home. If you don't keep up with your monthly payments, your home may be repossessed.

Could a RIO mortgage work for you?

Saga Mortgages can help you explore Retirement Interest Only mortgages and other later life lending options. We partner with Tembo, who are an award-winning digital mortgage broker. They provide expert advice and access to hundreds of mortgage deals.

It’s quick and easy to see your mortgage options. Register your details and complete our online fact find. You'll then see examples of relevant products, costs and interest rates.

If you’re eligible, we’ll also invite you to book a free advice session with a mortgage advisor. They will talk through your options in more detail and answer any questions you have. The session is relaxed, and you won’t feel any pressure to proceed.

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Get a sense of what's possible with our short online survey.

By filling in a few details, you'll quickly see what mortgage options are available to you.

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What are the benefits of a RIO mortgage?

  • Borrow into later life - Retirement Interest Only mortgages allow retirees and older homeowners to borrow into retirement when age limits can restrict other options.
  • Reduce your monthly costs - You only pay the interest on the loan each month, not the capital. This makes the monthly costs of a Retirement Interest Only mortgage lower than those on a standard mortgage.
  • Access equity in your home - Retirement Interest Only mortgages can provide access to the equity in your property. By freeing up some money, you could pay for travel plans, home upgrades or a loved one’s first home.
  • Stay in your home - A Retirement Interest Only mortgage allows you to unlock equity from your home without having to downsize or move. You can stay in the home you love and access the funds you need.
  • Choose how you repay - Some Retirement Interest Only mortgage deals allow you to repay the capital and the interest – or overpay to reduce the size of your loan. This might help you if you're worried about repaying the loan sum in the future.
  • Move your deal with you - You may be able to move home and port your Retirement Interest Only mortgage. This means your mortgage product transfers to your new home (up to the remaining loan value). This could allow you to avoid any early repayment fees, if you repaid early or remortgaged.

What are the risks of a RIO mortgage?

  • You might not be eligible - Lenders have different age limits for their Retirement Interest Only mortgages. Some require you to be at least 55 years old, while others set the limit at 60 or even higher. If you're not eligible, you could consider a Standard Interest Only mortgage.
  • Limits on affordability - When lenders assess you for a Retirement Interest Only mortgage, they tend to use the salary of the lowest earner in your household. Another option is to consider a Standard Interest Only mortgage, which looks at the affordability of joint applicants instead.
  • Minimum property value - When your affordability for a Retirement Interest Only mortgage is assessed, the value of your property plays a role. Lenders might require a minimum property value, to ensure it provides enough security for the mortgage. If your home's value is too low, you may not be able to get a Retirement Interest Only mortgage.
  • The loan amount remains - As you only pay back the interest each month, the full repayment of the loan is not due until the sale of the property. This tends to be when you move into long-term care or pass away. This could impact how much your loved ones inherit in the future.
  • Interest rates can change - If you choose a deal with a variable rate, your interest rate and monthly payments could change in the future. For example, when you start the loan, you could have an interest rate of 3%. But if the rate rises to 5%, this will increase the amount you pay each month. It’s good to plan ahead and make sure you can afford any rate changes.
  • Impact on benefits - If you take out a Retirement Interest Only mortgage, this could impact the amount of means-tested benefits or pension credit you receive.

See what our customers say

After having no luck in finding a mortgage with our usual mortgage broker and also with a company specialising in mortgages for the over 60's, we decided to give Tembo a try via Saga. What had started out as a stressful and worrying process was resolved quickly and efficiently. I cannot recommend them highly enough. It is unlikely we will move again, but, if we do, we will definitely use them again.

John

See what our customers say

We were introduced to Tembo through SAGA, a trusted provider of several services. We found Tembo knowledgeable, friendly and efficient and quickly had an offer-in-principle set up at which point our case was taken over by Rebecca who patiently and diligently navigated the blizzard of personal data required by lenders these days and finally escalated the matter with the lender when their requests became obscure and super-detailed. For this alone, it was worth using Tembo who provided efficient, accessible, patient and professional advice throughout.

Sue and Brian

See what our customers say

Saga Mortgages managed to sort a sensible mortgage for us in a speedy, professional and understanding manner. Thoroughly recommended! - for Saga Louts and youngsters alike!

Lance

Ready when you are

Have questions about Retirement Interest-Only mortgages or just want to find out more? You can speak to an expert seven days a week.

0330 018 3071

Mon-Thu 9am-8pm
Fri 9am-5:30pm
Sat-Sun 10am-3pm

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