Enable’s experienced IFAs in Bishop’s Stortford are always looking for ways to help with mortgages. In these Covid-19 times, many have started to think differently about retirement. And if you’re approaching retirement and still have an interest-only mortgage you’re not sure how you’ll pay off. Perhaps you should look at taking out an interest-only retirement (RIO) mortgage.
A RIO is another possible alternative to equity release that offers a way to clear your current mortgage debt without needing to downsize. The way a RIO mortgage works in a similar to traditional interest-only deals. RIO mortgages allow homeowners to remortgage their existing loan under similar terms to their current arrangement, meaning they only need to repay the interest for the term of the loan. If you are already drawing a pension and needing to still pay off your mortgage this can make things more achievable.
Since such loans have been more available the regulator has started to relaxed the rules. They even separated RIO mortgages from equity release in 2018 and widened the appeal of such loans in the process. Many big-name lenders now offer these retirement mortgages, giving peace of mind to those who would prefer to borrow from a high street bank, building society or mutual.
If you want some help working out the pros and cons of any mortgage agreement Enable’s IFAs are happy to help you look at the details. With and RIO your monthly repayments are normally cheaper than with alternative repayment mortgages. And a big concern for many, you can stay in your home with the property being sold after you die. Some deals include the ability to repay some capital too, enabling you to leave an inheritance to loved ones.
This type of mortgage removes the worry of repaying the capital sum owed in retirement.