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Penrith Building Society RIO Mortgage Rates & Details

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RIO Mortgage

  • Type Discounted
  • Rate 3.25%
  • APRC 4.60%
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Incentives:
  • Free Valuation
  • Free Application
  • Legal Fees Contribution
Offers:
  • Discounted Rate & Fees Assist
  • Interest-Only Mortgage
  • 2-Yr Early Repayment Charges
  • Maximum LTV - 50%

Background

Penrith Building Society been helping generations of savers and borrowers through their financial services needs since 1877, when they first opened our doors to the public in the town of Penrith. While they’ve changed plenty since to keep up with the times, their ethos has remained the same – to provide fair, straightforward services to their members which is at the heart of everything they do.

The Penrith has spent the past 140 years building a reputation as a Society that people can have the utmost trust and confidence in. Whilst its main focus is in Cumbria, services are provided nationwide, to all its members, young and old alike. Its the older generation they have recently focused on with a range of Retirement Interest Only Mortgages (RIO's) designed for the 55+ age group.

Eligibility

The Penrith Retirement Interest Only Mortgage (RIO) is designed specifically for homeowners who are over the age of 55 and require access to the equity in their property to enable them enhance their lifestyle in retirement. There is no maximum age limit.

This RIO mortgage could be used as a remortgage vehicle or to assist with a house purchase. Penrith suggest borrowers who are seeking to capital raise should take advice from a taxation and benefits expert to ensure that a RIO mortgage does not impact any means tested benefits.

Penrith Building Society have a sensible approach to lending in retirement whereby on joint applications they will assess each applicant individually in order they could sustain the mortgage solely throughout the term, should their partner pre-decease them.

All borrowers are required to meet the Society’s affordability requirements and be able to clearly demonstrate ongoing affordability of the loan, on a stressed basis, in the event of either party to the mortgage dying during the mortgage term. Personal pension income, state pension income, investment income and rental income are acceptable.

The Society does not place any additional restrictions upon who can reside in the property, standard conditions apply. Occupiers over the age of 17 should be declared at the point of application and will be required to complete an Occupiers Consent Form.

Whilst the Society may specify a term at the outset, repayment of the capital will not become due until the occurrence of one or more of the specific life events and while the customer continues to occupy the mortgaged property as their main residence, although interest payments will become due, no full or partial repayment of the capital is due or capable of becoming due. These life events include - death of sole or surviving joint borrower or entry into a long-term care facility of the sole or surviving joint borrower, where the borrower will not be returning to reside within the property.

The borrower is required to receive legal advice as a condition of the mortgage; and is strongly recommended to register a lasting power of attorney to mitigate the risks associated with managing financial affairs in the event of cognitive decline.

Features

This Penrith RIO Mortgage provides an initial tax-free lump sum cash release for immediate use, with the ability to make monthly repayments of only interest in return.

The minimum loan on this RIO mortgage is £75,000 with a maximum of loan upto £450,000. For mortgage applications above £450,000 please call the Equity Release Supermarket team on Freephone - 0800 802 1051 to check qualification and request your bespoke quotation.

The maximum purchase price is £500,000 and the property must be the homeowner's main residence and must be located within England and Wales. Please contact the Equity Release Supermarket team on 0800 802 1051 to check for eligibility.

There is no maximum term - it will run for the duration of the last surviving homeowner. There is no need for any repayment strategy such as endowment, investment or repayment basis either. The loan is an interest-only lifetime mortgage with no end date set and is repaid usually upon sale of the property.

The maximum loan-to-value (LTV) on this interest-only mortgage is 50% of the property value.

This is a form of residential mortgage which means that there are no safeguards if something unexpected arises which prevents the homeowner being able to continue making payments. So, to make use of this product, homeowners must be confident that their income will stay sufficient and constant enough to meet their payment obligations.

The homeowner must make all monthly interest payments as they fall due until the RIO mortgage finishes. This means that the homeowner could put their home at risk if they do not keep up with payments on this RIO mortgage.

If a single applicant passes away before the end of the term, the mortgage will still have to be repaid, usually by sale of the property. On joint applications, the mortgage will continue in the name of the survivor, with payments still being mandatory.

The Penrith Building Society aren't members of the Equity Release Council and consequently their plans don’t have the code of conduct applicable like other equity release schemes such as the No Negative Equity Guarantee.

The early repayment charges (ERC’s) on this discounted rate are applicable for the 2-year duration of the initial offer.

Options

This Penrith Retirement Interest Only Mortgage enables any homeowner to spend their tax-free cash as they wish, but unlike roll-up equity release schemes also have the ability to make monthly interest-only repayments to control the future balance as they think fit.

Penrith BS will accept applications which are based on retirees house purchasing, remortgage business and on unencumbered properties and the mortgage can also be transferred to a new home as long as there is adequate security for the mortgage.

The Penrith RIO mortgage offers discounted rates within its product range. Borrowers are able to select from any of Penrith Building Society’s standard product range. They do not have a bespoke RIO rate or product. As such, borrowers can benefit from the features and incentives associated with that particular product. However, these deals are subject to change, hence contact the Equity Release Supermarket team on Freephone 0800 802 1051 for all the latest interest rates on offer.

Once a specific deal ends, it will revert to the lenders standard variable rate, unless another deal is selected before or at expiry.

To obtain further information, or to request a quotation on the Penrith RIO Mortgage, please contact the Equity Release Supermarket team on 0800 802 1051 today.

Practicalities

The Penrith RIO Mortgage is ideal for the homeowner who wants to only make monthly interest payments over their lifetime and happy to provide proof of affordability. With this product, the homeowner is able to simply make interest only payments for the rest of their life.

RIO mortgages will ensure the balance will always remaining the same as it started, assuming repayments are maintained. This strategy is ideal for those looking to protect and maximise their inheritance, or looking to retain as much capital as possible for taking equity release at a later date.

This Penrith RIO mortgage is ideally suited for those looking for an interest-only mortgage, have considered, but decided not to downsize at this stage, but remain in their home.

RIO’s can prove useful for homeowners who aren’t quite ready for equity release, and would prefer to take themselves to a point in the future when they feel they are a better age, or wish to stop making repayments.

Alternatively, where homeowners can’t get a mainstream mortgage, or even where an interest-only mortgage needs repayment, the Penrith RIO mortgage can provide an excellent remortgage solution.

Another concept for these RIO mortgages is they offer an interest-only bridge facility into retirement. Maybe this is to a certain point where a repayment vehicle becomes available, such as a tax-free lump sum from their pension, or drawdown by crystallization of pension funds.

*the rate quoted above is a 2-year discounted fees-assisted rate - interest-only mortgage deal
**for remortgages and purchases on unencumbered properties, Penrith will pay legal costs using their solicitors
***free valuation and no application or product fee

To obtain further information or to request a quotation on the Penrith RIO Mortgage, please contact the Equity Release Supermarket team on Freephone 0800 802 1051.

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