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Cambridge Building Society has launched its first retirement interest-only (RIO) mortgage .
RIO mortgages allow older borrowers, over the age of 55, to borrow money against their home on an interest-only basis. This means they do not pay back the original amount borrowed to them; they only cover the interest charged. These mortgages continue until the property is sold, the borrower dies or moves into residential care.
This RIO mortgage comes at a rate of 3.39% variable for the term of the mortgage. There is a maximum loan-to-value of 55%. The product fee is £500, and valuation is free. Borrowers can also choose to overpay without penalty.
Borrowers must apply directly to Cambridge Building Society for this mortgage and it is open to both existing members and new customers.
It can be used by those looking to find alternative borrowing at the end of their current mortgage term or those wanting to release equity from their property.
The Cambridge Building Society RIO mortgage is only available on residential properties located in Bedfordshire, Buckinghamshire, Cambridgeshire, Essex, Hertfordshire, Norfolk, Northamptonshire and Suffolk, but if you are an existing borrower moving away from the East Anglian region, the lender can still help you buy a new home anywhere in England and Wales.
More information about retirement interest-only mortgages is available in our guide.
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