Retirement Interest-Only Mortgage

Retirement Interest-Only Mortgage

  • For those in Christian ministry aged 50+ within 12 years of retirement or already retired
  • Interest only payments

Retirement Interest-Only (RIO) Mortgages enable those in or retiring from ministry aged 50+ to buy a property that they intend to live in long-term, whilst only paying interest. 

There is no need to worry about paying off the capital. This will be repaid on your death or when you move permanently into long-term care. At this point, the property is sold and the mortgage repaid. 

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

 

Details

RIO mortgages are suitable for those aged 50+ who are within 12 years of their expected retirement from Christian ministry, including missionaries.

In order for us to assess affordability, you’ll need to be able to evidence your current or projected future pension income. 

Unlike other mortgages, there is no fixed term to a RIO mortgage. It is repaid upon your death or when you move permanently into long-term care. At this point, the property is sold and the mortgage repaid.

If you take out the mortgage with someone else, the property is not sold until both of you have either died or moved permanently into long-term care.

The interest due is payable in full each month. As such, the amount you will owe when the mortgage is repaid will remain the same (unless you make capital repayments), giving you peace of mind. 

We have a number of interest rates available depending on your circumstances, all of which are outlined in the ‘interest rates’ section below.

Yes, capital reductions on your mortgage can be made within the restrictions of the mortgage product. One of our mortgage advisers will be able to share these with you.

If you do not make capital reductions, the value of the mortgage will not decrease and will be repaid in full through the sale of the property in the future. 

Whilst a RIO mortgage is not portable from one property to another, if you decide to move home it may be possible to redeem your existing RIO mortgage and simultaneously take out another with us. In this situation, the Bank would waive its usual Early Repayment Charge. 

Yes, Consent-to-Let is permitted until the point at which you retire. After this point, you will need to live in the property.

Our minimum mortgage amount is £25,001 and maximum is £500,000.

The maximum loan-to-value we are able to consider is 70%.

You can use this mortgage to repay an existing mortgage or purchase a property.

It cannot be used to raise capital for other things such as home renovations.

Interest rates

Current interest rate 5.60%

  • Available to borrowers where loan-to-value is less than 75% and affordability is above 150% 
  • Rate fixed for 2 years.
  • Additional arrangement fee of £600.
  • The overall cost for comparison is 6.90% APRC*

*The above APRC is based on a mortgage borrowing amount of £100,000 over 25 years at 5.60% for the first 2 years, increasing to the Bank’s Standard Variable Rate (currently 6.70%) for the remainder of the mortgage.

Current interest rate 5.80%

  • Available to borrowers where loan-to-value is less than 75% and affordability is above 150%.
  • Rate fixed for 5 years.
  • Additional arrangement fee of £600.
  • The overall cost for comparison is 6.71% APRC* across all personal mortgages.

*The above APRC is based on a mortgage borrowing amount of £100,000 over 25 years at 5.80% for the first 5 years, increasing to the Bank’s variable rate (currently 6.70%) for the remainder of the mortgage

Current interest rate 6.70%

  • Available to borrowers where loan-to-value is less than 80% and affordability is above 150%.
  • This rate is managed by Kingdom Bank and is reviewed monthly.
  • Borrowers are given 14 days’ notice of any changes in the interest rate payable.
  • This discounted rate is available for the first three years of the mortgage, after which point it will revert to the Standard Variable rate.
  • The overall cost for comparison is 7.06% APRC* across all personal mortgages.

*The above APRC is based on a mortgage borrowing amount of £100,000 over 25 years at 6.70%

Current interest rate 5.65%

  • Available to borrowers where loan-to-value is less than 75% and affordability is above 150%.
  • This rate is managed by Kingdom Bank and is reviewed monthly.
  • Borrowers are given 14 days’ notice of any changes in the interest rate payable.
  • This discounted rate is available for the first three years of the mortgage, after which point it will revert to the Standard Variable rate.
  • The overall cost for comparison is 6.74% APRC* across all personal mortgages.

*The above APRC is based on a mortgage borrowing amount of £100,000 over 25 years at 5.65% discounted for the first 3 years, increasing to the Bank’s variable rate (currently 6.70%) for the remainder of the mortgage.

To see whether Kingdom Bank could provide you with a mortgage, please complete the form below. One of our friendly Christian mortgage team will be in touch to discuss your plans.

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At least one party to the mortgage must have this
We are unable to lend to residents of the European Economic Area due to European regulations.
The property must be in the UK
This can include Christian missionary work
Can we send you more information about Kingdom Bank and our work supporting Church growth in the UK?

You can also call us on 0115 921 7280 to discuss your enquiry.

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