If you are contemplating continuing to pay a mortgage into retirement, or to borrow money against your property and only pay interest payments, there’s some good news from Moneyfacts.co.uk: the number of products available in the last year has almost doubled – from 38 to 74.

The other positive news is that the increased competition has helped reduce the average rate being charged – if only marginally from 3.5% to 3.47%. However, a quick scan on comparison websites will show significant differences between lenders. As the best deals are often tied into fixed terms, it is essential that anyone contemplating this move takes expert independent advice.

According to Moneyfacts.co.uk, when RIO products were first launched in 2018, just two providers offered five products in total. In addition, within the last 12 months six new providers have also entered the market.

RIOs work very much like a standard mortgage product in that borrowers make monthly interest payments; however, there is no set end date or term for the mortgage. Instead, payments continue until either the borrower dies or goes into long-term care, at which point the property is sold to repay the debt.

Commenting on the increase in competition, Eleanor Williams, finance expert at Moneyfacts.co.uk, said: “Historically, many older borrowers who had retired or were shortly due to do so, found it difficult to find a new mortgage deal. When the Financial Conduct Authority reclassified RIOs as mainstream mortgages rather than equity release products in early 2018, a lifeline was thrown to many who may have previously felt trapped or not catered for.

“Those looking to take advantage of a RIO mortgage deal should consider their next steps carefully. Lifetime mortgages and equity release products may also be available, and so seeking independent financial advice could be invaluable in ensuring you select the right product for your circumstances.”

_____________________________________________________________________________________________________

So what sort of retirement are YOU on track for?

Finding out is easy using the RetireEasy LifePlan. Key in your data and you’ll see at a glance just how much you can safely afford to spend in retirement on your current savings trajectory

Many people are deterred from getting a real handle on their retirement prospects – some out of fear of what they will discover, and some because, with values of assets and other factors always changing, they don’t know how to keep track.

RetireEasy.co.uk makes it easy – you only have to set up your finances once, and then keeping up to date is easy. The ability to model different scenarios means that you can find the easiest way for YOU to manage your finances AND retire in comfort.

Find out your retirement income for just £4.99 per month. Here’s how https://www.retireeasy.co.uk/news/find-retirement-income-just-4-99