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Our residential mortgage range includes the 50+ Mortgage and the Retirement Interest Only (RIO) Mortgage. Both products are designed for borrowers aged over 50 looking for a mortgage in later life or seeking alternatives to traditional equity release.
- Interest only residential mortgages that can be used for purchase or re-mortgage
- A choice of fixed term up to 41 years (50+ Mortgage) or no end term (RIO Mortgage)
- 2 year, 5 year, 10 year and Fixed for Life fixed rates or 2 year discount, reverting to SVR
- 2, 5 and 8 year ERC’s based on the product chosen
- Available in England, Wales and Mainland Scotland
Lump sums can be released at 70% LTV and used to pay off existing mortgages, debt, for gifting to family or releasing equity. As a specialist lender, we’re able to accept a broad range of income sources from both pre and post retirement.
A suitable repayment vehicle such as sale of property must be in place for the 50+ Mortgage, we do not require a repayment vehicle for the RIO as the capital is repaid on death or entry into long term care. Downsizing Protection is available for our RIO Fixed for Life product (please see our Product Summary for more details).
Keep in mind these products don’t offer safeguards in the event of payment difficulties. If safeguards are an important consideration, you may wish to consider our Retirement Mortgage or our more traditional equity release products.
The 50+ Mortgage and RIO Mortgage can be recommended without holding a specialist equity release qualification.
What are the main features?
Interest only monthly repayments required. Ability to make optional overpayments of up to 10% per year from day 1.
|Loan Size:||£20,000 to £1.5 million|
|Purpose:||Purchase and re-mortgage|
|Option:||50+ Mortgage||RIO Mortgage|
|2 year discount rate||2.95% (£995 product fee)
3.25% (fee free)
|3.10% (£995 product fee)
3.35% (fee free)
|2 year fix rate||2.99% (£995 product fee)
3.30% (fee free)
|3.20% (£995 product fee)
3.45% (fee free)
|5 year fix rate||3.40% (£995 product fee)
3.55% (fee free)
|3.50% (£995 product fee)
3.65% (fee free)
|10 year fix rate||N/A||3.95% (£995 product fee)
4.15% (fee free)
|Fixed for Life rate||N/A||4.35% (£995 product fee)
4.55% (fee free)
(Standard Variable Rate)
|APR||2 year discount – 4.73%
(fee free) – 4.68%2 year fix – 4.74%
(fee free) – 4.69%5 year fix – 4.56%
(fee free) – 4.52%
2 year discount – 4.75%
2 year fix – 4.76%
5 year fix – 4.59%
10 year fix – 4.50%
Fixed for Life – 4.58%
|Product Fee||Fee free and £995 options available|
|2 year discount ERC||3% years 1 and 2|
|2 year fixed ERC||3% years 1 and 2|
|5 year fixed ERC||5% year 1, 4% year 2, 3% year 3, 2% year 4, 1% year 5|
|10 year fixed ERC||5% years 1-4, 4% year 5, 3% year 6, 2% year 7, 1% year 8|
|Fixed for Life ERC||N/A||5% in years 1-4, 4% in year 5, 3% in year 6, 2% in year 7, 1% in year 8|
|Min / Max Term||Minimum of 5 years from age 50, maximum term of 41 years||From age 50, no maximum term as no end date required|
|Repayment vehicle||Sale of property, cash in of investments or assets at end of term||Sale of property upon death or entry into long term care|
|Valuation Fees||Free up to and including property values of £1 million. Properties over £1 million will have the £1 million survey fee amount deducted|
|Legal Fees||Free for standard remortgage|
|Proc Fee||0.55% if through a Club or Network. 0.35% if paid direct|
|Location||England, Wales and Mainland Scotland|
|Legal Fees||Free for standard remortgage|
|Minimum Property Value||£120,000 (require £100,000 minimum equity)||£100,000|
|Maximum Property Value||£3 million for properties outside London
£5 million for properties in London and designated high value areas
|Employed/self employed income age limit||To age 80 based on underwriters discretion dependent on occupation.|
|Joint Applicants||Beyond age 75, we will assess each applicant on their ability to continue
with repayments in the event of death. We will factor in survivors/spouses pension and life cover.
|Number of income sources||We do not limit the number of income sources per applicant, any acceptable
income will be taken into account.
|Rental property income||Acceptable indefinitely, no upper age limit.|
To help you and your client understand how the 50+ Range differs to other Hodge Lifetime mortgages, compare below.
|50+ Residential Mortgages||Retirement Mortgage||Equity Release Mortgages|
|Offer fixed or indefinite loan term dependent on product chosen||Retirement Mortgage (hybrid equity release)
Indefinite loan term – lasts until death or moving permanently into long-term care.
Indefinite loan term – lasts until death or moving permanently into long-term care.
|The loans are interest only mortgages. For the 50+ Mortgage suitable arrangements must be in place to repay the capital at the end of the term. For the RIO Mortgage, the capital is repaid from the sale of the property after death or entry into long term care. Downsizing Protection is available for our RIO Fixed for Life product (please see our Product Summary for more details).||This is an interest only loan. The capital is repaid from the sale of the home after death or entry into
long term care.
|This is an interest roll-up loan. The capital and interest is repaid from the sale of the home after death or entry into long term care.|
|All monthly interest payments must be paid as they fall due.||All monthly interest payments must be paid as they fall due, at least until the youngest borrower
reaches 80, or the 5th anniversary of the loan (if later), when the borrower can choose to convert to interest role up.
|No payments are required during the term of the loan.|
|There are no safeguards if difficulties are encountered in meeting the mortgage payments.||If payments difficulties are encountered after age 80, the interest can be rolled up.||The borrower has the right to remain in their home until they die or move permanently into long term care.|
|The home is at risk if the repayments are not kept up on the mortgage.||Up to age 80, or the fifth anniversary after taking out the loan (if later), the home is at risk if the repayments are not kept up on the mortgage.||The borrower has the right to remain in their home until they die or move permanently into long term care.|
|The amount borrowed is based on the ability to afford the mortgage. This is based on income and
expenditure up to maximum loan to value ratio.
|We will consider pre and post retirement income in assessing affordability. A credit check will be performed. The amount borrowed is based on the ability to afford the mortgage. This is based on income and expenditure up to maximum loan to value ratio.||We will consider pre and post retirement income in assessing affordability. A credit check will be performed. The amount borrowed is based on a loan to value ratio determined by the borrowers age. Affordability not assessed, no credit check required|
|Residential mortgage qualification required to sell these products||Equity Release qualification required to sell this product||Equity Release qualification required to sell these products|
In order to be eligible for one of our residential mortgages, your client needs to demonstrate that they can afford the loan. The property must also form suitable security for the loan.
As part of the application, we will ask for proof of income and outgoings. We will use the information to assess affordability.
If the applicant is still working, we will need proof of their employed/self-employed income. Where the loan extends beyond the expected retirement date, the applicant must benefit from a reasonable level of income in retirement in order to be eligible. The sources of retirement income we take into account include:
- Pension income or future entitlements
- Investment income
- Rental income
- Ltd company residential
- Holiday rental income
- Spousal/maintenance income
- Sub-contractor income
- Some benefits (see here for more information on what we will and wont accept)
For the 50+ Mortgage, there must be a suitable strategy in place to repay the loan at the end of the term. Repayment strategies can be combined, but their total value must be sufficient to repay the loan. We accept a range of repayment strategies which include:
- Sale of the home when downsizing to a more manageable property in later life
- Sale of other property owned
- Sale of investments
- Proceeds of a maturing endowment policy
For the RIO Mortgage, we do not require a repayment strategy as the capital element of the loan is repaid on death or entry into long term care. Downsizing Protection is also available for our RIO Fixed for Life product (please see our Product Summary for more details).
The property must form a suitable security for the 50+ Mortgage. We accept a range of property types.
The Application Process
We will keep you informed throughout the application process. Where we need further information or clarification we’ll be sure to let you know.
Initial eligibility check
The affordability calculator helps you identify if your client is eligible. Details you will need from your client include employment income, retirement income and/or pension savings, together with your client’s age(s) and property value.
Provide a personalised illustration
Our illustration for your client will explain in more detail the features and risks of the mortgage. The illustration is prepared in a standard format. This helps you and your client compare the plans of different providers more easily.
Obtain a decision in principle
If your client wants to proceed to the next stage, complete an application for a decision in principle, you can find this in the resources section of this site. We suggest you help your client to be sure the information is accurate and complete so that we can process the application efficiently. If you’re visiting your client at this stage, you may want to ask for the evidence we need for a full application. Based upon the information provided, we’ll assess if your client is eligible for the loan amount requested. This will include a credit search.
We’ll let you know our decision and issue an updated illustration.
Submit a full application
When you submit the full application, we will need evidence to support the application. This will include statements of employment income, pension entitlements and copies of your client’s bank statements (bank statements only required for those loans that are over £250,000). View our helpful list of acceptable evidence here.
At this point (for the 50+ Mortgage) we will need evidence that the repayment strategy your client has detailed can repay the capital.
Your client may also need to pay for a valuation of the property at this stage. We’ll confirm this to you. Please note the fee is not refundable if the plan does not proceed, however we will not charge an application fee if the case does not proceed or is declined by us.
We’ll instruct a surveyor to visit your client’s home and value it. The surveyor will agree a suitable time to visit. The condition of the property will also be checked. If there are any urgent repairs required which may affect the value of the property, these may need completing as a condition of the loan. We will confirm if this is the case.
Once the application has been verified and the property has been valued, we will finalise the proposed terms of the mortgage in an offer.
After you have reviewed this with your client, if they are happy to proceed they may appoint their own solicitor for the conveyancing process, however this will be at their expense. Alternatively, Hodge Lifetime will nominate a solicitor to complete the work to put the mortgage in place. This will be funded by us and not cost you or your client.
At this stage, checks are made to ensure that the property provides suitable security for the mortgage. The detailed searches undertaken may identify queries which we will want to clarify.
Once the legal charge is ready, we will arrange completion of the loan and pay out the loan proceeds to the bank account nominated by your client.
What are the main differences in your 50+ Mortgage and your RIO products?
The 50+ Mortgage is an interest only fixed term, resi mortgage available from age 50 with a maximum term to age 95. At the end of the term a repayment vehicle such as downsizing is required to repay the capital.
The RIO Mortgage, also an interest only resi available from age 50 and has no end date. The capital is repaid upon death or entry into long term care.
The 50+ Mortgage requires minimum equity of £100,000 whereas the RIO Mortgage has no minimum equity requirement.
With loans from £20,000 the minimum property value for 50+ Mortgage is £120,000, for the RIO Mortgage it’s £100,000 due to us not needing £100,000 minimum equity.
Will the borrower have to make repayments on the 50+ Mortgage and the RIO Mortgage?
Yes. The interest must be paid each month.
For the 50+ Mortgage there must be sufficient means to repay the loan capital at the end of the term. This could be through sale of property (main residence or 2nd home) or cashing in investments or assets.
For the RIO Mortgage, the capital is repaid on death or entry into long term care. Downsizing Protection is available for our 55+ RIO Fixed for Life product (please see our Product Summary for more details).
How much can my client/s borrow?
We can lend a maximum of 70% LTV on both mortgages with loans from £20,000 to £1,500,000 (if you want to obtain a loan over this amount please refer to us by calling 0800 138 9109).
The final amount we’ll lend is based on our assessment of your client’s ability to afford the loan. We’ll look at employment income (including self-employed) and retirement income that’s currently being paid, or forecast to be paid upon retirement.
We’ll also look at outgoings including any loans or financial commitments already in place.
For the 50+ Mortgage, we must be satisfied that the repayment vehicle chosen (options are sale of home, cash in of investments or assets) is of sufficient value to repay the loan at the end of the term.
For the RIO Mortgage, the capital is repaid on death or entry into long term care.
As a responsible lender, we look at providing mortgage loans that remain affordable now and in the future.
How often does your SVR change?
We review the SVR regularly. The SVR may change to reflect changes in the Bank of England base rate or due to our funding or administration costs, economic effects and the impact of new laws or regulations. If it changes, we’ll provide reasonable notice.
Can your 50+ range of mortgages be repaid at any time?
The loans can be repaid at any time; however, an early repayment charge applies in the first five years for five-year fixed rates, the first two years for two year fixed rates and the first eight years for ten year and Fixed for Life fixed rates.
See our product summary for full details.
During any initial fixed rate or discount period, overpayments of up to 10% can be made off the capital without incurring early repayment charges.
What happens if my client/s circumstances change?
Our 50+ Mortgages are portable so can be transferred with a house move. The costs involved in transferring are the responsibility of the borrower, and the new property must form suitable security for the mortgage.
Paying interest on the loan could impact future income levels needed to fund retirement. We encourage you to discuss retirement plans with your client to ensure changes to circumstances can be accommodated.
Do your 50+ Mortgages conform to the standards laid down by the Equity Release Council?
Our 50+ Mortgages are not equity release lifetime mortgages. They don’t fall within the remit of the Equity Release Council’s product standards. This means they do not offer the safeguards traditionally associated with equity release products.