New RIO mortgage product from Legal & General

September 14, 2020 by Alan

Lenders

Legal & General has taken steps to broaden the scope of its later life mortgage product offer with the launch of a brand new retirement interest only (RIO) loan.

This new loan will give anyone who is over the age of 55 and owns a home valued at £100,000 or more the option of taking out a loan worth a maximum of 60% of the property value. They will be able to use this loan either as a completely new interest only loan, or to take the place of one they already have.

Legal & General is indicating that it will want to see financial evidence of the incomings and outgoings of anyone looking to take out one of these new RIO mortgages, so that this can be used to work out how much they can afford to borrow. The company states that this is necessary to make sure any mortgage can be repaid whether they are still working or in retirement.

Speaking to Financial Reporter, Legal & General CEO Claire Singleton said that retirement takes many forms these days and the pandemic had proven that plans needed to be able to withstand unforeseen events, adding:

“A retirement interest only mortgage has the benefit of allowing people to use their home to borrow, while helping them anticipate the long-term costs and impact on their income and assets.”

More mortgage products coming onto the market is good news for advisors with CeMAP training, and further evidence that the sector is recovering.