At Equity Release Supermarket, we are continually looking to expand the lenders we work with, to give our customers access to the widest selection of plans from across the whole of the market.
That’s why we are proud to announce our partnership with LiveMore Capital, a specialist Retirement Interest-Only (RIO) mortgage provider.
While LiveMore Capital are new to the market, their team have a wealth of retirement lending experience and are bringing a fresh and innovative approach to the RIO mortgage market, at a time when we are seeing an increasing number of enquiries from customers about this type of ‘later life lending’.
Continue reading, below, for more information on this exciting new partnership.
The rise of RIOs
In 2018, RIO mortgages joined the growing roster of later life lending options available to homeowners over the age of 55.
They were specifically designed for those with interest-only (IO) mortgages coming to the end of their terms, but without any means to repay it.
That’s because a RIO effectively allows you to continue a residential IO mortgage into retirement, by continuing to make monthly interest-only repayments, just as you had done with your previous residential IO mortgage. They can also be used to raise additional funds to spend as you wish, as long as there is enough available equity in the property.
To find out more about RIOs, you can download our free factsheet here.
The major difference with a RIO is that it doesn’t come with an end date. Rather like an interest-only lifetime mortgage, it can be repaid when the last surviving borrower dies or moves into long term care.
When first launched, RIOs struggled to gain popularity, primarily because they are residential mortgages, meaning that borrowers must pass lenders’ affordability checks and be able to prove their ability to meet their monthly repayments both now and in the future. Depending upon your personal circumstances this can be difficult, and many borrowers were rejected for this reason. Moreover, as RIOs are residential mortgages, if repayments are not met, then the lender has the right to repossess the property – not something to contemplate in retirement.
While affordability checks and potential repossession don’t exist in the world of lifetime mortgages (the most popular type of equity release plan), RIOs do have their advantages over lifetime mortgages – the main one being the amount you can potentially borrow – which before LiveMore joined the market was 70% of the value of your home. LiveMore have now extended this to 75%.
What makes LiveMore Capital different?
As well as the greater borrowing power LiveMore have brought to the RIO market, they have also taken an innovative approach to how they access affordability – which as mentioned above has been a stumbling block in the past for RIOs.
Instead of using just the borrower’s income to assess the maximum LiveMore will lend, they also use the Office of National Statistics (ONS) data on the average yearly outgoings by age – as the older we get, the less we spend.
Other RIO lenders access affordability simply based on the income of the last surviving partner, which again can be a stumbling block if both applicants don’t have adequate income. While LiveMore take the same approach, they will also consider all forms of income and a life assurance policy, if this is in place.
They also offer a range of terms for their RIOs to meet your individual needs with the availability of 5, 10, 20 year and lifetime terms.
Plus, as LiveMore are specialist RIO mortgage lenders, they access each case individually and have a reputation for finding a solution when other lenders have said ‘no’.