Hinckley & Rugby Building Society has launched a Retirement Interest Only (RIO) mortgage exclusively through Legal & General Mortgage Club.
Members of Legal & General can now access the lifetime discount product for their clients which is 2.55% of the Society’s standard variable rate (SVR). The current charging rate stands at 3.59% per client.
The mortgage is designed to provide peace of mind to borrowers who will never have to pay SVR or switch products unless they want to. If their circumstances do change, they will not have to pay any early redemption charges (ERCs) to exit the product.
The mortgage is also available with an offset savings facility.
This mortgage is available at up to 60% loan-to-value (LTV) with a maximum loan of £500,000 and capital raising accepted. Applicants must be at least 55 years old but there is no maximum age. Valuation is free on properties worth up to £1 million.
What’s more, all sustainable sources of income into retirement will be considered and the loan will be repaid from the sale proceeds of the property after a specified life event.
There is an application fee of £199 and the £800 completion fee can be added to the loan.
Carolyn Thornley-Yates, head of sales and marketing at Hinckley & Rugby, commented: “We’ve designed this RIO mortgage to work for people already in retirement or working into it.”
“As it is a lifetime discount they can plan for the long term and, thanks to no ERCs, also be able to adapt should their circumstances change.”
She continued: “We’ll take a broad look at all the income the applicants have and any unusual cases will get a fair hearing at the daily meetings of our Mortgage Referral Committee of senior decision makers and underwriters.”
Danny Belton, head of lender relationships at Legal & General Mortgage Club, added: “The RIO mortgage is a key growth area for the market and is providing increasing opportunities for brokers and customers alike.”
“With more products available, brokers have more choice to help them meet the needs of their older clients, ensuring they find a product that best suits their retirement plans.”