What are the 55+ Mortgage and the 55+ Retirement Interest Only (RIO) Mortgage?

Flexible mortgages into retirement

The 55+ range are standard residential mortgages, designed specifically for older borrowers. You have to pay the interest each month until the end of the term.

With the 55+ Mortgage, you can select the term over which you want the loan to last. This allows you to match the term of the loan to your future plans. However, you must be in a position to repay the loan at the end of the term by exercising your repayment strategy.

With the 55+ RIO, you don’t have to choose an end date, you just keep making interest only repayments and the capital is then repaid upon your demise or entry into long term care.

We will take a number of sources of income into account in assessing your ability to afford the loan, including:

  • Income from employment or self-employment;
  • State, personal and company pensions, whether in payment or not;
  • Investment income;
  • Rental income.

For the 55+ Mortgage, the following repayment strategies are acceptable in order to repay the loan at the end of the term:

  • Sale of your property when you downsize;
  • Sale of other property that you own;
  • Sale or maturity of your investments, including any endowments or lump-sums you are entitled to when taking your pension

For the 55+ RIO, you do not need to have a repayment strategy as there is no end date on your loan and the capital you owe is repaid on your demise or entry into long term care.

The table below compares our 55+ Mortgages with other mortgages in Hodge Lifetime's product range.

55+ Residential Mortgages Retirement Mortgage Equity Release Mortgages
Offer fixed or indefinite loan term dependent on product chosen.

Retirement Mortgage (hybrid equity release)

Indefinite loan term - lasts until death or moving permanently into long-term care.

Equity Release

Indefinite loan term – lasts until death or moving permanently into long-term care.

The loans are interest only mortgages. For the 55+ Mortgage suitable arrangements must be in place to repay the capital at the end of the term. For the 55+ RIO. The capital is repaid from the sale of the property after death or entry into long term care. This is an interest only loan. The capital is repaid from the sale of the home after death or entry into long term care. This is an interest roll-up loan. The capital and interest is repaid from the sale of the home after death or entry into long term care.
All monthly interest payments must be paid as they fall due. All monthly interest payments must be paid as they fall due, at least until the youngest borrower reaches 80, or the 5th anniversary of the loan (if later), when the borrower can choose to convert to interest roll up. No payments are required during the term of the loan.
There are no safeguards if difficulties are encountered in meeting the mortgage payments. If payments difficulties are encountered after age 80, the interest can be rolled up. The borrower has the right to remain in their home until they die or move permanently into long term care.
The home is at risk if the repayments are not kept up on the mortgage. Up to age 80, or the fifth anniversary after taking out the loan (if later), the home is at risk if the repayments are not kept up on the mortgage. The borrower has the right to remain in their home until they die or move permanently into long term care.

The amount borrowed is based on the ability to afford the mortgage. This is based on income and expenditure up to maximum loan to value ratio.

We will consider pre and post retirement income in assessing affordability. A credit check will be performed.

The amount borrowed is based on the ability to afford the mortgage. This is based on income and expenditure up to maximum loan to value ratio.

We will consider pre and post retirement income in assessing affordability. A credit check will be performed.

The amount borrowed is based on a loan to value ratio determined by the borrowers age.
Residential mortgage qualification required to sell these products. Equity Release qualification required to sell this product Equity Release qualification required to sell these products

Deciding on which plan is suitable for you can be a complex process, and it is a good idea that you obtain financial advice. In fact, we insist upon it. Read more about the role of the financial adviser.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

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