Mansfield Building Society has launched its retirement interest only (RIO) proposition with two products that enable borrowers to take subsequent additional drawdowns up to a maximum of 40% LTV.
RIO mortgages offer older homeowners the advantages of equity release but without interest ‘roll up’ eating into their equity.
The 5-year product has a 2.83% variable pay rate (2.76% below SVR), a £199 application fee and an £800 completion fee. The 5-year deal also benefits from the fact that it does not have an early repayment charge.
The 3-year fixed rate has a 3.35% pay rate, £199 application fee, £800 completion fee and a 3% early repayment charge. Both RIO mortgage products are available to borrowers over 55 years of age.
Mike Taylor, head of products and savings at the Society, said: “As a mutual building society, we believe it’s important that older borrowers have choice.
“Our common sense, straight forward and innovative approach is designed to give later-life borrowers options to help support their lifestyle needs in retirement – we believe the access to subsequent draw-downs will prove popular with borrowers.
“Borrowers can access the equity they have built up in their home to help close family members get onto the property ladder, or use the funds to maintain their lifestyle and fulfil their retirement plans.
“In addition, provided borrowers can maintain the interest only payments going forward, our RIO mortgages can also be used to help borrowers who have an existing interest only mortgage and are unable/not yet ready, to repay the capital balance due.
“RIO mortgages will provide welcome relief to many who may have underestimated their financial needs in retirement.”
Access to The Mansfield’s RIO mortgages is exclusively available through qualified advisers holding the CeReR or CertER qualification.