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Family Building Society launches RIO mortgage products

  • 29/04/2019
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Family Building Society launches RIO mortgage products
Family Building Society has introduced three retirement interest-only mortgage products, all with a maximum loan to value (LTV) ratio of 50 per cent and a minimum age at application of 65.


Two products are lump sum interest-only, including a five-year fixed rate at 3.69%, as well as a discounted variable rate for term at 3.84%.

They both provide a £999 product fee and an early repayment charge for five and three years, respectively.

Family BS also introduced a flexible RIO, allowing customers to overpay regularly, or by lump sum, and later draw on the overpayment without further underwriting.

The customer can also arrange a payment holiday or reduction using the overpayment that has been previously built up.

This flexibility allows the borrower to use the equity in their property as their needs change through retirement.

Keith Barber, director of business development at Family BS, told Mortgage Solutions that the new RIO mortgages are not available to all intermediaries, but the distribution is limited to six broker firms, one specialist packager and its advice team.

The broker firms include Key, Age Partnership, Berkley Vittoria, Capital Fortune, Charles Cameron and John Charcol.

He added: “The interest rate and products fees charged on the product are the same whether a customer comes via one of the brokers or through our direct team, so no dual pricing. The reason for limiting distribution in this way is manage the volume of business we receive initially.”

The new RIOs complement Family BS’s existing retirement lifestyle booster – a standard interest-only product providing a means of taking a regular ‘income’ from the property over a period of up to 10 years – and its repayment mortgages which are open to borrowers up to age 95.

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