Understanding Your Later-Life Mortgage Options

Whether you want to stay in your home, unlock the value of your property, or secure extra funds, there are options to help. Understanding them will guide you in making the right choice. 

In this blog, we will explain the different types of later-life mortgages, how they work, and help you pick the right one for you. 

1. What is a Later-Life Mortgage?

A later-life mortgage is a loan for people aged 50 and older. It lets you borrow money or unlock the value of your home as you near retirement. There are different mortgage options to fit your needs. 

Later-life mortgages can help you: 

• Stay in your home longer by unlocking its value. 

• Access extra funds for retirement or other goals. 

• Choose the best payment option for you, like interest-only or regular payments. 

By checking your options, you can find the right mortgage for retirement. 

2. Types of Later-Life Mortgages

Every situation is different. And the products on offer may evolve over time. To make sure you choose the best option for you, you should speak with a mortgage expert.  

Below are two common types of later-life mortgages. 

Retirement Interest-Only (RIO) Mortgages 

With a RIO mortgage, you only pay the interest each month. This keeps your payments low. The loan is repaid when you pass away or move into long-term care, usually through the sale of your home. This option is ideal if you want to stay in your home without worrying about repaying the loan during your lifetime. 

Key features: 

• Pay only interest each month. 

• Loan repaid when you pass away or move into care. 

• Flexible terms with no fixed end date. 

Equity release 

Equity release allows you to take cash from your home without moving. You can choose to receive a lump sum or regular payments. The loan is repaid when your home is sold, usually when you pass away or go into long-term care. This is ideal for getting extra funds from your home. 

Key features: 

• Access cash from the value of your home. 

• No monthly repayments unless you choose to. 

• Loan repaid from the sale of your home. 

3. Benefits of Later-Life mortgages

Later-life mortgages offer many advantages, including: 

• Financial security: Get extra funds for retirement, home improvements, or other goals without having to downsize. 

• Stay in your home: Many options let you live in your home for as long as you like. 

• Tailored for you: These mortgages are designed for older borrowers, with flexible options to fit your needs. 

4. Things to consider before choosing a Later-Life mortgage

Before you choose a later-life mortgage, think about the following: 

• Your Financial goals: Do you need extra funds for retirement, or are you looking to lower monthly payments? Understanding your needs will help you decide. 

• Your health and longevity:  Mortgages like equity release are typically repaid from the sale of your home when you pass away or move into long-term care. It’s important to consider your health, life expectancy, and future care needs when planning. 

• Repayment plan:  With a RIO mortgage, the loan is usually repaid from the sale of your home when you pass away or move into long-term care. However, it’s important to plan ahead and understand how this fits into your overall financial goals. 

5. How Perenna can help

At Perenna, we believe later-life lending should be clear and fair. We offer long-term, fixed-rate RIO mortgages to give you peace of mind in retirement. 

With a Perenna RIO mortgage, you will enjoy: 

• A fixed interest rate for predictable payments. 

• No age limit – because borrowing should not be limited by age. 

• Flexible options, like the ability to make overpayments after five years with no extra charges. 

We are here to help you choose the best option for a happy and stable retirement. Whether it is a Retirement Interest-Only mortgage or equity release, we will guide you to the right choice for you. 

Want to learn more? 

Use our mortgage calculator to see how much we could lend you and get an idea of your monthly payments. It is quick and easy! 

You could lose your home if you don’t keep up your mortgage repayments. 

Correct at time of publishing.