What is a Retirement Mortgage?

A flexible way to borrow in retirement

The Retirement Mortgage is a lifetime mortgage, meaning that the amount we lend you does not have to be repaid until you die or move permanently into long term care.

You have to pay the interest charged on the lifetime mortgage each month until the youngest borrower reaches age 80 or the 5th anniversary after taking out the loan (if later). Thereafter, you can choose to stop paying the interest, meaning it will be added to the loan instead.

The table below compares the Retirement Mortgage with other types of mortgage that may be available to you.

Traditional residential mortgage Retirement Mortgage Interest roll-up lifetime mortgage
The loan term is fixed. The loan term is not fixed - it lasts until you die or move permanently into long-term care. The loan term is not fixed - it lasts until you die or move permanently into long-term care.
The loan may be on a capital repayment or interest-only basis. If the loan is interest-only, a separate repayment vehicle to repay the capital is normally required. This is an interest-only loan. The capital is repaid from the sale of your home. This is an interest roll-up loan. The capital and interest is repaid from the sale of your home.
You must make all of the monthly payments as they fall due, until the end of the mortgage term. You must make all of the monthly interest payments as they fall due, at least until the youngest borrower reaches age 80, or the 5th anniversary of the loan (if later), when you can choose to have the interest rolled up. You are not required to make any payments during the term of the loan.
Your home is at risk if you do not keep up the repayments on your mortgage. Your home is at risk if you do not keep up the repayments on your mortgage. You have the right to remain in your home until you die or move permanently into long-term care.
The amount you can borrow is normally based on your ability to afford the mortgage based on your employment income and your expenditure, up to a maximum loan to value ratio. The amount you can borrow is based on your ability to afford the mortgage based on your retirement income and your expenditure, up to a maximum loan to value ratio. The amount you can borrow is based on a loan to value ratio determined by your age.

Deciding on which plan is suitable for you can be a complex process, and it is a good idea that you obtain financial advice. In fact, we insist upon it. Read more about the role of the financial adviser.

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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