The Beverley Building Society has launched a retirement interest only (RIO) mortgage for older borrowers looking for mortgage terms with no maximum age or loan term.
The mutual’s discounted mortgage rate is available to anyone over the age of 55 and in receipt of pension income. The offer is a three-year discounted variable interest rate of 2.99% representing 2.00% off the Society’s Standard Variable Rate, which is currently 4.99%.
The product fee is £495 for applicants with a Lasting Power of Attorney in place, or £795 for those without.
Other product details are as follows:
- Available for loans of up to 55% of the property value
- Minimum loan £25,000 (purchase) or £40,000 (remortgage)
- Maximum loan £350,000
- Minimum property value £125,000
- Available up to 3.5 times income (both single and joint)
- No upper age limit or maximum term
- Pension and other forms of non-salaried income accepted
- Free legal fee and valuation fee on all remortgages, when using the Society’s panel of professionals.
Graham Carter, the Beverley’s head of lending, said: “RIO is a natural extension to our existing later life lending offering, which is proving to be very popular given current market demand from older borrowers.
“Since the introduction of the new pension freedoms, we think our RIO mortgage offers people an affordable way of unlocking some equity from their home without interest rolling up and increasing the capital debt over the term of the loan.
“It’s a cost-effective way of accessing cash which can be used to either top up retirement income, gift a deposit to a younger family member as part of their legacy planning, raise capital for a specific purchase or simply having a nest egg of cash for that rainy day.”