What Is a Retirement Interest Only Mortgage
A retirement interest only mortgage, often called a RIO mortgage, is an interest-only mortgage designed for older borrowers. You borrow against your home, pay the interest each month from your retirement income, and the loan itself is repaid when you die, move into long-term care, or sell the property.
It sits between a standard mortgage and a lifetime mortgage. Like a standard mortgage, it requires an affordability check and a monthly payment. Like a lifetime mortgage, there is no fixed end date and the loan does not have to be repaid during your lifetime. That combination makes it useful for people who want to stay in their home, release some equity, and keep the debt from growing.
An £80,000 RIO loan at 5.5% costs about £367 a month. Against £24,000 of annual retirement income, that is about 18% of monthly income. If that share feels comfortable and leaves room for other costs, a RIO mortgage is worth exploring; if it stretches the budget, a smaller loan or a different product may be safer.
- Interest-only mortgage for older borrowers, repaid on death, care move or sale.
- Requires an affordability check, unlike most lifetime mortgages.
- Balance stays flat while interest is paid in full.
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