We offer RIO mortgages. They can help over-55s free up money in retirement. These mortgages provide an alternative to equity release, lifetime or standard-term mortgages.
With a RIO mortgage, your client could:
- buy a residential property with an interest-only mortgage, using the sale of their house as the repayment strategy.
- remortgage from a standard interest-only mortgage, using the house sale as the repayment strategy.
- release equity to make home improvements or enjoy their retirement.
There isn't a specific end date for this type of mortgage. Your client can repay it from the sale of their home when they die or move into a care home or another property.
Your client must keep up with the interest-only payments during the mortgage term.
How to apply for an RIO mortgage with Nottingham Building Society
- Process your application through our broker portal system as a residential interest-only mortgage.
- Enter the borrowing period required – up to 40 years, or 40 years if unknown.
- Choose an RIO product.
Lending policy for RIO mortgages:
- Interest-only terms, with overpayment allowed, subject to early payment charges (ERCs).
- The sale of the property is the only repayment vehicle assessed at affordability.
- A maximum of two applicants, both using the property as their main residence.
- Capital raising is permitted subject to standard lending criteria.
- Maximum 60% loan-to-value (LTV).
- 55 minimum age.
Affordability assessment
We assess the affordability of the mortgage based on the following:
- Joint borrowers must demonstrate they can sustain the mortgage if the highest earner dies.
We consider:- personal unsecured debts (unless evidenced that they aren’t transferable).
- guaranteed transferable income.
- Project income into retirement if the applicant is still working.
- Income from employment or self-employment won’t be included in this assessment.
- Rental income may be considered where this isn’t the applicant's main income.
- Current income at the point of application.
- Income from unencumbered properties
Contact your local Nottingham business development manager for more information on RIO mortgages.
Your home may be repossessed if you don’t keep up repayments on your mortgage.