Retirement Mortgages

Retirement Mortgages

Compare UK Retirement Mortgage Options

Mortgages In Retirement

Mortgages In Retirement Service

  • Borrowing options from age 55 to 99
  • Independent advice on your mortgage options
  • Interest only options
  • No obligation service
  • One short form to complete

Mortgages In Retirement Quotes & Advice »

Retirement Mortgages

When it comes to retirement age, many UK homeowners are looking to unlock the value in their property in order to stay there – or to fund their retirement.

The UK has become a nation of home-owners rather than pension-payers.

According to the financial firm OneFamily, over 65s in the UK hold nearly five times as much wealth in property as they do in pensions. And 19% of over-50s intend to use their property as a means of funding retirement.

Mortgages In Retirement Service

  • Borrowing options from age 55 to 99
  • Independent advice on your mortgage options
  • Interest only options
  • No obligation service
  • One short form to complete

Mortgages In Retirement Quotes & Advice »

Why might you need a mortgage after retirement age?

Many borrowers were encouraged to take out low-cost interest-only mortgages, in the expectation that a continuing rise in property values would mean that their home would be worth many times more than they originally paid for it when their mortgage came to an end.

Interest-only repayment means that the total amount of the original loan still needs to be repaid at the end of the mortgage period. As they come towards the end of their mortgages, these homeowners face either having to sell their home and move out, or remortgage.

For some, the value of their home may not be enough to repay the original loan and have enough left over to buy another home.

New regulations for RIOs

To help these borrowers, the Financial Conduct Authority (FCA) reclassified Retirement Interest Only (RIO) mortgages in March 2018 so they can be sold as standard mortgages rather than under the restrictions that apply to the selling of equity release products.

As a result, many more RIO mortgages are now available to older home owners.

Demand creates new options

There were no mortgage products available in 2014 which could come to an end when the borrower was aged between 80 and 84 (that is, five-year mortgages granted to 75 year-olds).

In February 2019 there were 1,078 products available to this age group, according to figures from finance data provider Moneyfacts.

Would-be borrowers who will be aged 85 or over at the end of a mortgage had eight times as many deals to choose from, compared with just five years earlier.

What are Retirement Interest Only mortgages?

They are similar to standard interest-only mortgages for younger borrowers, except that:

  • Borrowers only have to prove they can afford the monthly interest repayments
  • The loan is only paid off when you sell the house, move into long-term care, or die

What’s the difference between an RIO mortgage and equity release?

With equity release, also known as “lifetime mortgages” you borrow a portion of your property’s value, but you don’t make monthly repayments.

The cost of the borrowing is added on to the total loan and is only repaid when you die, or move into long-term care and the property is sold.

With equity release there will be less value left in your property to pass on to your family when you die, compared with an RIO mortgage.

You are strongly advised to get independent financial advice if you are considering taking out equity release in your home.

Independent advice about ROI mortgages

 

 

 

Many younger people will not necessarily be “settled” in their own homes by their 30s, or even 40s, and they are less able to help their own children to get established in the property market than previous generations.

And divorce may mean that they face new financial challenges mid-life, which many parents want to help with.

All these are reasons why older home owners may be looking to “share the family wealth” by releasing some of the value locked away in their homes.

Older home owners may want to release capital to fund another property purchase:

  • A buy-to-let property which will generate rental income
  • A holiday property which the whole family can use
  • A “downsizer” property which has come available before they need to move into it (especially if there is a shortage of suitable properties close by to family)

Or home owners may want funds to make other income-generating investments.

The variety of financial products coming onto the market designed for older homeowners means that they now have more options for securing their finances at pension age.

The good news is that in the last 12 months the options for people age 60+ for interest only mortgages has improved significantly with many lenders bringing out flexible products for older borrowers.

For example Post Office have brought out a retirement link mortgage which allows borrowers to take out a mortgage on an interest only basis up to age 80.

 

RBS Mortgage Offer

Interest Only Mortgage Deal

  • Initial Rate – 1.99%
  • 75% Loan To Value (LTV)
  • 5 Year Fixed

Overall cost for comparison 3.50% APRC

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Other ways of raising finance from your home

Rather than remortgaging your home you may want to consider what is called a second charge mortgage.

Homeowner Loan

Free up money while leaving your current mortgage in place

A second charge mortgage (often referred to as a secured loan) can be used for all kinds of purposes including:

  • Home improvements
  • Business purposes
  • Buy to let property deposit
  • School fees
  • Wedding or new car

Borrow from £25,000 to £500,000 with flexibility to repay the loan at any time

Get a no obligation loan quote >>

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Post Office

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Post Office provide a mortgage repayment calculator where you can work out how much your monthly payments will be – click here for more details »

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