Older borrower RIO mortgage for 73 year old client stuck on their lender's expensive standard variable rate
Trinity Financial's broker, Jordan Maynard, recently helped an older borrower remortgage from their current lender to secure a lower rate. As they were 73 years old, their lender would not offer them a new mortgage, leaving them in an undesirable position. They either needed to downsize or find a new lender offering cheaper terms.
What did they do for a living?
Our client was retired but had pension income and equity in his home.
Did he have a complex situation?
He was 73 years old, and as the fixed-rate term had ended, they were on their lender's standard variable rate. Their current mortgage provider would not offer them a new fixed product, so they either had to sell their property and downsize from their £850,000 home or remortgage with another provider. They called us and asked for urgent assistance to resolve their situation.
Why did they need our help?
They were on their expensive standard variable rate and did not want to keep paying so much out each month. They also didn’t want to worry about remortgaging every couple of years and paying arrangement fees. They wanted certainty on the monthly repayment for as long as possible.
Did we struggle to find a lender?
No, the first building society we approached declined the application because our client had recently married and his new wife is not named on the property. The second lender was happy to offer mortgage terms.
Was the mortgage on interest-only?
Yes. Our broker arranged a RIO mortgage, which is an interest-only mortgage for later life lending.
The Retirement Interest Only Mortgage (sometimes called a ‘RIO Mortgage’) is available to people aged 55 and over. It’s a loan secured against your home. You pay interest monthly, so the amount you owe doesn’t increase over time.
You can use it for most purposes (including paying off an existing mortgage). What's more, you don't have to repay the debt until you, or the last remaining borrower, die or move permanently into long-term care.
Was the rate particularly good? –
A fixed rate of just over 5.60% until 2031, followed by the lender's standard variable rate, currently 7.74%, for the remaining term of the mortgage. To qualify for this rate, our client met the 45% equity requirement in their home.
Where did they get your details from?
They found our contact details via Google.
Was there anything else unusual?
No. Our client had a private service pension and a state pension, which qualified them for the RIO mortgage.
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Are you looking to buy a property and require expert advice? We’re here to help you find a solution – no matter how complex your circumstances. Our expert brokers have extensive experience providing creative solutions to secure mortgages for our clients.
Call Trinity Financial on 020 7016 0790 to secure an older borrower mortgage or book a consultation
The information contained within was correct at the time of publication but is subject to change.
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