RIO mortgages are aimed at older homeowners; people over the age of 55 who want to release a cash lump sum from their property. .
How it works:
Maximum mortgage amounts are determined by pension income only and the value of your property
You will need to pass the mortgage affordability checks to prove you can afford the payments, now and in the future
Earned income will not be used in the affordability assessment
Some lenders may be willing to lend you more at a later date, if your income and/or the value of your home increases significantly
Every month you pay interest on the mortgage from your income
In most cases, it is possible to make overpayments but charges may apply and you should always check with the lender
Early repayment is possible but charges may apply and you should always check with the lender
The capital is only repaid when you die or move into care, from the sale of the property
Unlike a normal residential mortgage, there is no set end date to this type of mortgage
If you are married, this option provides guaranteed tenure i.e., the mortgage does not have to be repaid until both of you have passed away
*Before applying, consider seeking advice on how borrowing additional funds may impact on your tax position and benefit entitlement
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