Retirement Interest Only Mortgages Case Study

Retirement Interest Only Mortgages Case Study

A retirement interest only (RIO) mortgage is available to persons over 55, retirees, and people planning their retirement. It allows homeowners to open up a portion of the equity in their home, providing tax-free money to help support their lifestyle, renovations, loved ones, and more.

A RIO mortgage requires sufficient evidence of income to be taken out, as there must be payments made each month. These payments offset the interest on the loan, meaning when it is eventually paid off it won’t be any higher than when it started. The remaining value of the loan is typically covered by the equity left in your property when you pass away or move into long-term care.

John’s Story

The story begins with John: 67 years old, a retired engineer, from Tavistock. John was looking for a way to enjoy his retirement, and help his children buy their first homes as well.

John already had a decent, stable monthly income from his pensions along with other sources of investments he made throughout his life. However, these amounts weren’t enough to provide financial assistance to his children while also maintaining his lifestyle.

The preservation of his day-to-day was a big point for John – he wanted a solution that would enable him to support his children without downscaling his home or compromising his way of living. That’s when he found Hansford Bell.

Hansford Bell’s Solution

We began a three-step process with John, starting by understanding his challenges and aims, and finding ways we could implement a solution while ensuring that all his requirements were met or exceeded.

1. Initial Consultation

Our first meeting with John was fruitful. We had a fun conversation where he revealed his desire to provide for his children while also enhancing his lifestyle.

He mentioned his steady source of income and clarified that it wasn’t enough to support his goals. Having paid off his mortgage some 20 years prior, we suggested some solutions based around re-mortgaging his property.
Any doubts he had were washed away when we ran him through the process, showing how it would use his financial security to allow for improvements in his lifestyle while also providing enough money to help his children. Eventually, we settled on a RIO mortgage to unlock his home’s equity.

2. Customised Solution

The next step was to devise the solution. We crafted a RIO mortgage plan that would allow John to release his home equity while keeping the rights to his property.

This mortgage solution required interest only payments which would easily be covered by his monthly income.
This meant that John could preserve his daily lifestyle, provide enhancements to it with the extra capital, and supply his children with some much-needed support in buying their own homes as well.

3. Mortgage Process

The final stage was to manage the mortgaging process. John was a busy man and wanted to enjoy his retirement as much as possible, so Hansford Bell facilitated this by carrying out every step of the process – from application to approval.

This helped to ensure a seamless, hands-free transition – with no stress for John – into the retirement interest only (RIO) mortgage.

The Result

With a new financial strategy in place, John Davis has received significant improvements to his lifestyle. He’s been able to enjoy his golden years without worry, while also providing a great gift to support his children as they’re beginning to create families of their own.

John’s journey is a great example of how Hansford Bell can help you achieve your dreams and goals. Retirement doesn’t have to be the end of your adventure, and a RIO mortgage can empower you to seek out the way of living you desire.

Equity Release may involve a Lifetime Mortgage or Home Reversion Plan. To fully understand the features and risks, please ask for a personalised illustration

A Fresh Approach to Financial Planning and Advice.

Hansford Bell aren’t your average team of financial specialists. We take the time to get to know our clients and help them realise what they want from their life, whether that’s a personal ambition or a financial goal.

Our planners are highly experienced and know the industry inside-out. We combine simplified, straight-forward tips and guidance with cutting-edge technology and a comprehensive understanding of your situation. We focus on your finances, so you can focus on living your life.

Want to know more? Talk to us today and we can start making that dream future a reality!