A fixed interest rate that will never increase.
So you'll always know exactly what your monthly payment is.
Borrow up to 8.5 times your annual income.
Potential to borrow more based on your income than you can with other mortgage providers, subject to affordability checks.
Interest-only monthly payments.
You only pay the interest each month, and it will never go up.
Interest-only mortgage for later life.
The Retirement Interest Only Mortgage is available to people over 55. It’s a loan secured against your home. You pay the interest each month, which means the amount you owe doesn’t increase over time.
You can use it for most purposes (including paying off an existing mortgage). What's more, you don't have to repay the loan until you, or the last remaining borrower, die or move permanently into long-term care.
Our Retirement Interest Only Mortgage can only be taken out with a mortgage adviser.
As a last resort, your home may be repossessed if you do not keep up with payments.
- Use the money however you want
You can spend it in all sorts of ways. This includes home improvements, helping children buy their first property or supporting grandchildren with their education. If you give the money away, they may need to pay inheritance tax in the future. There are few restrictions on how you spend the money. You can even pay off an existing mortgage.
- Interest is payable each month
The interest due is payable by you in full each month. In this way, you always know how much you owe.
- There’s no fixed term
You don't have to repay the loan on a specific date. It’s repaid on your death or when you move permanently into long-term care. At this point, the property is sold and the loan repaid. If you take out the loan with someone else, the property isn’t sold until both of you have either died or moved permanently into long-term care.
- The interest rate doesn’t vary
The interest rate is fixed throughout so there are no surprises. You’ll pay the same amount every month.
- You can pay more to reduce how much you owe
If you want to pay off more than the interest due each month, you can make overpayments from time to time. In this way, you’ll reduce how much you owe even further. So long as any overpayments don’t exceed our limits, there are no charges.
- You can still move home
The new home is subject to our usual lending criteria. In other words, assuming it’s a property we would be happy to lend against, you can move home.
- Am I eligible?
You should be 55 or over and living in, or buying, your own home, in England, Wales or mainland Scotland. You should be confident you can pay the interest each month now and in the future. The minimum loan you can apply for is £10,000 and your property must be worth more than £70,000 or £100,000 for flats, maisonettes, ex-council, ex-housing association or ex-Ministry of Defence properties.
The actual loan amount is determined by an affordability assessment up to a maximum of 60% of your property value. Based on your employed and/or retirement income (including retirement income yet to be earned) of lowest earner.
- What happens if I have an existing mortgage?
A Retirement Interest Only Mortgage can be used to repay an existing mortgage. What’s more, a Retirement Interest Only Mortgage doesn't have to be repaid until you die or move permanently into long-term care.
If you're paying off an existing mortgage, you may have to pay an Early Repayment Charge to your existing lender. If you haven’t got an existing mortgage, you can still apply and use the money for something else.
- How does this compare to the Optional Payment Lifetime Mortgage?
A Retirement Interest Only Mortgage commits you to pay the interest each month. This means the amount you owe doesn’t increase over time. If you’re not sure you can commit to this, consider the Optional Payment Lifetime Mortgage. This gives you the option to pay off some of the interest, but you don’t have to. Any unpaid interest is added to the loan.
- How flexible is a Retirement Interest Only Mortgage?
You can repay more than just the interest on the loan to reduce how much you owe even further. It’s also possible to still move home with a Retirement Interest Only Mortgage. What’s more, you can apply for a further loan against your property in the future.
- Missing interest payments
If you miss monthly interest payments, we’ll always try to help. If we can’t resolve the situation, as a last resort your home may be repossessed.
- Early Repayment Charges
If you repay your Retirement Interest Only Mortgage early, or pay more than the overpayment limits, there may be an Early Repayment Charge.
- Moving home
You can move home and transfer the loan as long as the new property meets our lending requirements. If the new property is worth less than your current home, you may have to pay back part of your mortgage.
- Means-tested benefits
If you take out a Retirement Interest Only Mortgage, it could affect any means-tested state benefits or pension credit you receive.
Our affordability calculator will give you an idea of the amount you could borrow. Please make sure you complete the calculator as thoroughly as possible for an accurate result.
Once you've had a calculation, you'll need to speak to an Adviser, who can talk to you about your circumstances and complete a full Decision in Principle. This will provide you with the exact amount that can be borrowed; it's subject to the information you provided plus the results of a credit reference check. Applications are subject to our standard lending criteria, status and financial standing.
The calculator gives an estimate of the potential amount you could borrow but is not a guarantee of lending. Additional calculations and evidence will be required to fully assess how much you can afford to pay. This may reduce the amount we would be prepared to lend.
Think carefully before securing a loan against your home. As a last resort, your home may be repossessed if you don't keep up with payments.
Please make sure you click on information buttons in the calculator to understand what amounts you need to include.
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Start getting answers to your questions about later life mortgages to help you decide if this is the right option for you.
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