Abingdon Living Jan - Feb 2020

All you need to know about Retirement
Interest-Only (RIO) mortgages
It’s been over a decade since the 2008 financial crash
shook the world and wiped £90 billion off the value of
the UK’s biggest companies.
As a result, borrowing became more difficult for those
heading into their later years with many lenders
lowering their maximum lending age limit and reducing
the provision of interest-only mortgages.
However, since the Financial Conduct Authority (FCA)
recently improved access to mortgage borrowing for
those in retirement, the door finally reopened for
everyone seeking finance; no matter their age.
What is a RIO mortgage?
RIO mortgages – short for Retirement Interest-Only
– allow borrowers to pay a monthly interest payment
with no set end date as it will run until a ‘significant life
event’, such as the homeowner moving into long-term
care or dying. It is at this point the mortgage is repaid
by the sale of the mortgaged property.
Who eligible for a Newbury Building Society RIO
mortgage?
Our RIO mortgage is designed to support borrowers
in later life who either want to move or do not want
to downsize their current property and wish to remain
in their home. We lend to those aged 60 and above
who are retired and in receipt of their pension or other
ongoing income.
Why might a person want to borrower in
later life?
There are many reasons why older borrowers might
want to take out a mortgage:
• To purchase a retirement property which better
suits their needs as they get older
• To fund home improvements or extend their
property
• To release cash to top up their pension income
• To gift funds to a loved one looking to step
onto the property ladder
Is a RIO mortgage different to that of a standard
residential mortgage?
A RIO mortgage is very similar to that of a standard
residential mortgage, with two key differences:
1. The loan is usually repaid when the borrower either
sells the house, moves into long-term care or dies
2. The borrower only has to prove they can afford the
monthly interest repayments because the method
of repayment the loan is already agreed
Essentially, the ‘retirement’ element of the mortgage
means there is no defined end date the capital has to
be repaid by.
Our mortgage appointments can be undertaken in
branch, by telephone or by video link. If you would
like to talk to a qualified mortgage adviser about RIO
mortgages, contact us to book an appointment.
Abingdon branch, 1 West St. Helen Street,
Abingdon, OX14 5BL Call: 01235 527750 or
email: abingdon@newbury.co.uk
Julie Harris,
Abingdon Senior Branch Manager
YOUR MORTGAGE IS SECURED ON YOUR HOME. THINK CAREFULLY
BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME
MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR
MORTGAGE.
Always speak to an independent financial
adviser who will explore your options with you
and determine which route suits your
circumstances.
Newbury Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority (Financial Services Register number 206077). 7464
Newbury
Building Society