Retirement Interest-Only Mortgage for a Borrower in Her Sixties
£125,000 · Until sale/death/care · 5.45% fixed for life. A 64-year-old recently retired teacher owned her home outright but needed to raise £125,000 to purchase a static caravan as a holiday retreat and fund home impr...
The Client
64-year-old recently retired teacher
The Challenge
A 64-year-old recently retired teacher owned her home outright but needed to raise £125,000 to purchase a static caravan as a holiday retreat and fund home improvements. Standard interest-only mortgage lenders would not advance given her age and the absence of a credible repayment vehicle other than the property itself.
Our Solution
Doulton arranged a Retirement Interest-Only (RIO) mortgage - a regulated product specifically for older borrowers where the loan is repaid when the property is sold, the borrower moves into care, or on death. The RIO allows the borrower to service only the interest each month, keeping the capital balance constant. Her pension income was sufficient to comfortably service the interest.
The Outcome
£125,000 released. Caravan purchased and home improvements completed. Monthly interest payment: £568 - fully covered by pension income. The RIO structure means the loan does not grow over time, preserving her estate for her children. Key highlights: RIO mortgage - specifically designed for older borrowers; Capital balance constant - loan does not grow; £568 monthly interest covered comfortably by pension income.