Are you approaching retirement and concerned about rising interest rates? Buckinghamshire Building Society has just launched a new mortgage specifically designed for people like you. It’s called a “Retirement Interest-Only” (RIO) mortgage, and it could offer some peace of mind in these uncertain times.
What’s a RIO Mortgage?
A RIO mortgage is a type of loan where you only pay the interest each month, not the actual capital. This means your monthly payments stay the same, even if interest rates go up. You’ll pay off the full amount of the loan at the end of the mortgage term, usually when you sell your home.
Buckinghamshire BS’s New RIO Offer
Buckinghamshire BS’s new RIO mortgage has some key features that might be appealing:
- Fixed Rate for 5 Years: The interest rate is fixed at 5.59% for the entire five-year period. This means you won’t be surprised by sudden rate hikes, giving you more control over your budget.
- Up to 60% Loan-to-Value: You can borrow up to 60% of the value of your property, which could be helpful if you need a larger loan.
- Minimum Loan of £50,000: You’ll need to borrow at least £50,000 to qualify, which could be suitable for many retirement home purchases.
- Maximum Loan of £1 Million: The maximum loan amount is £1 million, which may be enough for a larger property if needed.
- For People Aged 55 and Over: This mortgage is designed specifically for people who are 55 years old or older, so you’ll need to be in this age bracket to apply.
Why is this Mortgage Important?
Claire Askham, Buckinghamshire BS’s Head of Mortgage Sales, explains that demand for RIO mortgages has been growing, especially in the last year. She says many brokers have requested fixed-rate RIOs because they’re hard to find in today’s market.
The main attraction is the stability it offers. With a fixed rate, you know exactly how much your monthly payments will be, even if interest rates fluctuate. This can be especially important for people in retirement who often have a fixed income.
Important Points to Remember
While this mortgage sounds great, there are a few things to keep in mind:
- Capital Raising is Allowed: You can use this mortgage to raise capital, which could be helpful if you need extra funds.
- Fees May Apply: There are likely fees associated with this mortgage, such as early repayment charges. Be sure to ask about all the fees involved before committing to the loan.
Next Steps
If you’re interested in learning more about Buckinghamshire BS’s new RIO mortgage, it’s a good idea to contact them directly. They can provide you with more details about the product and see if it’s right for your specific situation.