Retirement Interest Only

All you need to know and how to submit your application

The Melton provides Retirement Interest Only (RIO) mortgages to help borrowers over the age of 65 who wish to either release some of the equity from their property for reasons such as making home improvements or to fulfil their lifestyle requirements, or to renew a standard interest only mortgage, enabling them to use the sale of their property as a suitable repayment method without a set end date.

RIO mortgages are repaid from the sale of the property following a life event which results in the property becoming unoccupied by the owner, such as death or moving into long term care.

Key Criteria

• Minimum age of 65 for all borrowers
• No maximum age
• No minimum income or equity requirement
• Maximum 50% LTV
• Leasehold properties must have a minimum of 110 years remaining at application
• Property & Financial Lasting Power of Attorney must be registered
• Affordability assessed on a final survivor basis for joint applicants

Register with the Melton

Although our RIO application process is paper based, you will need to ensure you have registered to submit business with us through our online registration process. You can register here to complete this process. Once you have submitted your registration, our Broker Support team will action this within 4 working hours.

Check Affordability & Review Criteria

You can access our RIO Affordability Calculator here – affordability is assessed on a interest only basis and we will consider earned income if the customer is still employed at the point of application.

For joint applications, affordability will be assessed on a final survivor basis to ensure the mortgage remains affordable in the event of bereavement of either party. This will be based on the lowest of the individual applicant’s income.

 

The affordability assessment will be based on the lowest of the acceptable income types below:

At point of application	At point of retirement
Current earned income Current state pension Current other pension income (defined contribution/benefits &/or private/personal*) Income from sustainable investments (including rental income)	Projected state pension Projected other pension (defined contribution/benefits &/or private/personal*) Income from sustainable investments (including rental income) Transferable pension benefits (for joint applicants)

*For private/personal pensions a current value should be provided and should evidence a  level of income required to cover the interest only loan amount through to a life time event occurring.

Decision in Principle

You can download or DIP form here – once completed, you can send this to our Broker Support team for processing. Please email the form to brokersupport@mmbs.co.uk. Once we have reviewed this and carried out a credit check, we will email confirmation of our decision.

Submit Application & Declaration

Once you have received confirmation that the DIP has been accepted, you can complete our Residential Mortgage Application Form. You will also need to sign and return a copy of the RIO Intermediary Declaration alongside your application.

Please ensure your customer meets our Key Criteria listed above before submitting your application and provide the customer with our Customer Guidance Notes & FAQ’s.

If you have any questions you can call our Broker Support team on 01664 414144 or email us at brokersupport@mmbs.co.uk.