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Hinckley & Rugby offers retirement interest-only discount

Intermediaries can now access a discount for term retirement interest-only (RIO) mortgage from Hinckley & Rugby.

The building society is offering its RIO product to the intermediary market following the successful trial of an exclusive with Legal & General Mortgage club, which saw a large quantity of applications.

The discount for term product is 2.55% off the society’s standard variable rate (SVR), and the current charging rate is 3.59%.


The mortgage is designed to provide certainty for later life borrowers. If their circumstances change, they will not have to pay an early repayment charge (ERC) to exit the product, which is available at up to 60% loan-to-value (LTV) with a maximum loan of £500,000.

Applicants must be at least 55 but there is no maximum age. Capital raising is accepted and 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, says: “We stepped into the RIO market in May and have been so encouraged by the response that we now want to offer it to all intermediaries.”

“Our manual underwriting policy is particularly well-suited to understanding and working with older borrowers. Any complex cases can be considered by the daily meetings of our Mortgage Referral Committee of senior decision makers and underwriters.”

She adds: “It’s positive to see a lender pushing the envelope in this area and recognising strong demand from later life borrowers. I’m sure it will be met positively by our member firms.”


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