Retirement Interest Only Mortgages (RIOs)
A Retirement Interest Only Mortgage (sometimes called a ‘RIO Mortgage’) is available to people over 55. It’s a loan secured against your home and importantly you pay the interest each month, which means the amount you owe doesn’t increase over time.
You can use it for most purposes (including paying off an existing mortgage). What's more, you don't have to repay the loan until you, or the last remaining borrower, die or move permanently into long-term care.
How does a RIO differ from a standard Lifetime Mortgage?
- You will be required to pass an affordability assessment in order to apply for a RIO. In some instances, especially where an applicant is retired and living on fixed income, this can be tricky to pass.
- A RIO mortgage always involves paying off the interest as you go, while a lifetime mortgage does not compel you to make any monthly repayment.
- Your home may be at risk with a RIO if you do not maintain your payments as agreed with the lender at the start of your plan.
