Retirement Interest Only mortgages (RIO)
The Nottingham for Intermediaries provides Retirement Interest Only (RIO) mortgages to help older borrowers meet their retirement needs and as an alternative to equity release/lifetime mortgages or standard term mortgages. With a RIO mortgage your client may be able to:
The mortgage has no set end date and your client can repay the mortgage from the sale of their home when they move into sheltered accommodation, residential care, move home or pass away. Your customer is responsible for meeting their monthly interest only payments during the term of the mortgage.
- Remortgage from standard interest only mortgage with house sale as the repayment strategy
- Release equity to make home improvements or enhance retirement lifestyle.
You can view our current RIO mortgage products here.
Applying for a RIO mortgage with The Nottingham is simple:
The following lending policy applies to RIO mortgages in addition to the standard residential criteria:
- Process your application through our broker portal system as a residential interest only mortgage
- This product doesn’t have a term. To ensure documentation is clear, enter the length of time the customer intends to borrow for (max 40 years) or 40 years if this is unknown
- Select a RIO product.
- Maximum 50% LTV
- Minimum age for this product is 55
- Maximum of two applicants, both of whom must use the property as their main residence
- Capital raising is permitted subject to standard lending criteria
- Only allowed on interest only terms, although the customer may overpay subject to ERCs applied to this product
- Sale of property will be the only repayment vehicle assessed at affordability.
We will assess the affordability of the mortgage:
- At point of application using current income
- Projected into retirement where applicant(s) are not currently retired. Employed or self-employed income will not be included in this assessment. Rental income may be considered where this is not the applicant's main income
- Lowest earning borrower’s ability to sustain mortgage if bereaved for joint customers. This will include:
- Guaranteed transferrable income
- Personal unsecured debts (unless evidence can be provided that they are not transferable).
For further information please contact your local Nottingham business development manager.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE