Retirement Interest Only (RIO) in Somerset
The Retirement Interest Only mortgage (RIO), is an interest only mortgage aimed solely at older clients. It is feasible that such a mortgage could last until you die and then be paid off using the proceeds from your estate. The debt remains the same throughout the term as you only pay the interest element of the mortgage. However, you do have options as with most other mortgages to reduce the capital amount to an agreed limit each year.
The difference from other forms of Equity Release, is the RIO mortgage is based on your ability to pay the interest on the borrowed amount each month. If for example, you wanted to release £100,000 from your home on a RIO mortgage at an interest rate of 3%, the cost would be around £250 per month. The funds would only be made available having passed an affordability test like those associated with standard residential mortgages.
You must keep up with the monthly interest repayments otherwise your home is at risk. If you are unable to meet the repayments, you will be subject to the lender terms and conditions which may affect your ability to remain in the property. Therefore, you must be sure that you can afford to service the debt with a RIO. However, the equity in the property will not be impacted by the mortgage, only by market fluctuations and the condition of the property itself.
How do I know which one is right for me?
Rest assured, at Aspire Financial Services you will find the experience and expertise to guide you through an area of the residential mortgage market often regarded as one of the most sensitive and regulated. Contact us today and we will arrange an initial call to discuss all your options.
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