Freephone 0800 802 1051
Freephone 0800 802 1051

Vernon Building Society RIO Mortgage Details

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RIO Mortgage

  • Type Discounted
  • Rate 3.95%
  • APR 5.00%
Incentives:
  • Free Application
Offers:
  • No Early Repayment charges
  • Interest-Only Mortgage
  • LPA Requirement*

Background

The Vernon Building Society is an independent mutual building society that was founded in 1924 in Stockport, Cheshire. The Society seeks to provide both competitive mortgages, savings and investment products and The Vernon has become a trusted source of reliable financial advice within the local community.

The Vernon provide a range of mortgage products, which include specialist Retirement Mortgages. The society do not consider lending to retirees an issue if they are in receipt of verifiable income, allowing homeowners over the age of 55 access to Retirement Interest Only Mortgages (RIO’s) secured on their property.

Eligibility

The Vernon 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.

This RIO mortgage could be used for homeowners who are looking to either release some equity for their retirement planning, or if they simply wish to move home.

The Vernon RIO Mortgage is available on both a single and joint life basis with a minimum age of the youngest homeowner being 55. There is no maximum age limit.

The minimum loan on this RIO mortgage is £25,000 with a maximum of loan upto £250,000. For mortgage applications above £250,000 please call the Equity Release Supermarket team on Freephone - 0800 802 1051 to check qualification and request your bespoke quotation.

There is no specific minimum acceptable level of income which is preferably indexed-linked. The Society uses income and expenditure analysis instead of income multiples to assess affordability.

Vernon's minimum property valuation on their retirement mortgage is £80,000, with no minimum equity remaining requirement. Additionally, the property must be the homeowner's main residence and must be located within England and Wales.

Adverse credit such as arrears, defaults and CCJ’s can be acceptable, dependent upon the amount, longevity and level of credit registered. Please contact the Equity Release Supermarket team on 0800 802 1051 to check for eligibility.

Features

RIO Mortgages provide an initial tax-free lump sum cash release for immediate use, with the ability to make monthly repayments of only interest to the Vernon.

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. The loan is an interest-only lifetime mortgage with no end date set.

If necessary, the amount borrowed can be paid back from the sale of the property when the borrower dies or moves into alternative accommodation such as long term care. During the term of the mortgage you are responsible for meeting the monthly payments which can be interest only (so you are not paying off any of the capital you owe) or capital and interest repayment.

The maximum loan-to-value (LTV) on this interest-only mortgage is 50% of the property valuation, subject to qualification of income to support this figure.

Unlike equity release schemes, there are no protections in place with this mortgage product if the borrower has difficulty making payments. This is a residential mortgage which means that there are no safeguards if something unexpected takes place, preventing the homeowner from being able to make payments. So, to make use of this product, homeowners must be confident that their income will stay sufficient & 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.

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. If your application is joint, then the mortgage payments may become unaffordable in the event of death of either party. This may necessitate the sale of the property, and the survivor needing to move to alternative accommodation. You should ensure that you have a plan for this eventuality.

The Vernon 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.

There are no early repayment charges under Vernon's Retirement Interest-Only mortgages, meaning you can repay the mortgage at any time without penalty.

Options

This Vernon Retirement 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.

The society will accept applications which are based on retirees house purchasing, remortgage business and on unencumbered properties.

Additional borrowing may be available with the Vernon RIO Mortgage, but availability and approval is not guaranteed. The amount available is directly related to the homeowner’s ability to afford the higher loan amount and will therefore go through the same affordability verification process.

The mortgage is portable and can be transferred to a new property.

The Vernon RIO mortgage usually offers discounted rates within its product range. However they 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 societies RIO mortgage, please contact the Equity Release Supermarket team on 0800 802 1051 today.

Applicants who have a Lasting Power of Attorney (LPA) in place are eligible for a lower interest rate. Should the LPA be registered after the mortgage is taken out, Vernon will apply the quoted rate on receipt of proof of the LPA registration.

Practicalities

This Retirement Interest Only 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 with no maximum term as the mortgage does not need to be repaid until death, or you move into care and the property is sold.

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 product is ideally suited for those looking for an interest-only mortgage and do not want to downsize, 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. They are also ideal for those looking for an interest-only mortgage and do not want to downsize, but remain in their residence.

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

Another concept for these RIO mortgages is that Vernon are effectively offering 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 1.25% discounted rate for 5 years with requirement for a Lasting Power of Attorney being in place.

To obtain further information, or to request a quotation on the Vernon Building Society Retirement Interest Only Mortgage, please contact the Equity Release Supermarket team on Freephone - 0800 802 1051.

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