The Society undertakes lending to two categories of borrower where the end of the mortgage will be after retirement. One of these is the Society’s Retirement Interest-Only Mortgage and the other is defined as lending in/into retirement.
Free Basic Legal Service is not available for RIO remortgages and remortgages where any party to the mortgage is aged 70 or above at application. The Society will provide £250 cashback towards Legal Costs. Scottish Building Society require customers’ solicitors to complete a Later Life Certificate if any party to the mortgage is aged 70 or above at application, or a Retirement Interest-Only Certificate if the application is for a Retirement Interest-Only mortgage. Scottish Building Society does not cover the cost of any work associated with this.
The Society will need comfort by way of appropriate information and assurances that the level of retirement income will be sufficient to continue to meet the ongoing monthly mortgage payments. For lending purposes the Society considers age 70 as normal retirement age. These mortgages effectively operate in the same way as a standard residential mortgage, as they have a specified term by the end of which it is expected all borrowing will be repaid.
The Society will consider mortgage applications where the term extends beyond the borrower’s expected retirement age, normally up to maximum age 85, where the borrower can clearly demonstrate a sustainable income stream to ensure the mortgage continues to be affordable throughout the term of the mortgage, including following any change in circumstances during the term, such as retirement.
The Society will take a prudent and proportionate approach to assessing the applicant’s income beyond retirement date.
The closer the customer is to retiring, the more robust the evidence of the level of income in retirement should be.
For guarantor cases, where the personal guarantor is making a contribution towards the mortgage payments and will be in retirement, an appropriate affordability assessment will be conducted, in line with the above.
Legal advice associated with later life lending may attract additional costs over and above solicitors standard charges.
Maximum Age
The following table states the borrower’s maximum age where the Society would normally expect the borrowing to be repaid:
|
Product |
Normal Maximum Age |
|
Owner-Occupier |
85 |
|
Retirement Interest-Only |
No Maximum |