Retirement interest only (RIO) mortgage calculator
How to use the retirement interest only mortgage calculator
To get an idea of the maximum you could potentially borrow with a retirement interest only mortgage (RIO), you simply need to input the value of your property, the age of the youngest homeowner (which must be at least 50) and your postcode (to understand where you live) – as these are some of the criteria that lenders use when deciding how much money you can borrow.
An introduction to retirement interest only mortgages
RIO mortgages have been specifically designed to help homeowners whose current interest only mortgages are coming to an end and to help carry them forward into retirement. RIO’s can offer an alternative to equity release, where disposable income is available to meet regular lifetime monthly payments.
RIO’s work in the same way as an interest only mortgage, whereby the accruing interest on the amount borrowed is repaid each month. However, the main difference is that RIO’s have no end date, or fixed term. As a result, RIO’s and interest only mortgages differ in the way the loan is repaid. With a conventional interest only mortgage, the balance is repaid at the end of the term agreed with the lender. With a RIO mortgage, the balance is repaid in the same way as a lifetime mortgage, which is when you die or move into long term care.
RIO mortgages are typically offered by smaller building societies and it’s important to remember that they are residential mortgages. Which means that you must pass the lender’s affordability checks to qualify and your home may be repossessed if you don’t keep up your monthly interest repayments.