New research by Canada Life Home Finance has shown that home owners taking out equity release mortgages on their properties have helped 46 first time buyers get on to the housing ladder each week in 2018.
But, despite the growing popularity of equity release it’s not always the best option for everyone.
There are alternatives out there that need to be considered and one of those is retirement interest-only mortgages.
“An retirement interest-only mortgage differs from a standard interest-only mortgage in that there isn’t a set end date for the loan. It only has to be repaid when you sell your property, die or go into long-term care.” Ruth Jackson, Money Week
RIO mortgages have often been overlooked as they’ve been lumped in with equity release products, but the Financial Conduct Authority – the City regulator – has reclassified RIO mortgages as standard mortgages. This means mainstream lenders now offer them.
One drawback to RIO mortgages is the interest rates. Whilst they are still competitive compared with equity-release products, standard mortgages are still much more affordable.
So, if you are still at an age where a regular mortgage is an option then it makes sense to hold off on an RIO mortgage until that is no longer the case.
When it comes to working out what’s best for you, it’s advised that you sit down with a financial advisor so that they can understand your individual situation.
Do you need help figuring out what to do next?