(LT32) 5 Year 2.51% Discount RIO Further Advance

This mortgage comes with an initial rate of 5.59% which includes a 2.51% discount from our Standard Variable Rate for 5 years, followed by our Standard Variable Rate for the remainder of the term, currently 8.10%.


(LT32) 5 Year 2.51% Discount RIO Further Advance

Initial rate


Subsequent Rate (SVR)


Overall cost for comparison

7.50% APRC

Maximum loan to value (LTV)




Arrangement Fee


Early repayment charge


Is this product right for you?

What are the key features of this product?

This is a variable rate mortgage product which means monthly payments can go up or down during the term of the discount period. This is different to a fixed rate product. The rate of interest is linked to the Society’s Standard Variable Rate (SVR) for mortgages. During the first 5 years, the interest rate charged will be 2.51% below the Society’s SVR – this is the discount period and rate.

The lowest interest rate you might pay during this period will be 2.50% which is called the “floored” rate.  This means that if the Society’s SVR is below 5.01% at any time during the period of the product, you will not benefit from the full rate of discount of 2.51%.

Following this initial product period, we will contact you with the options available. If you do nothing at the end of the product period, you will move to the Society’s SVR which may mean your payments increase.

This product is available on:

  • An Interest-Only repayment basis. This means that your monthly repayments will only pay back the interest on your initial loan amount. The capital balance will not reduce.

This product is available for properties in England and Wales.

There is a £150 fee payable for setting up this mortgage.

This product is available for loans of at least £5,000 and up to £750,000.

This product can only be taken if the existing mortgage has been active for at least 6 months.

This product can only be taken if the total amount of this new loan plus the amount owed on the existing mortgage does not exceed £1,500,000.

This product can only be taken if the purpose of the loan is to make improvements to the property.

This product requires all borrowers to be at least 55 at date of application.

This product has no maximum age for borrowers.

This product will not require a full repayment until either the property is permanently vacated or the date of death of the final surviving owner.

Who is this product designed for?

This product is designed for customers over the age of 55, not wanting a specific term on a residential mortgage, who:

  • want a further advance on their property.

  • have at least 50% equity in their property.

  • have surplus monthly income to manage their finances if the Society’s SVR goes up which would mean an increase to the monthly repayment amount.

  • want the option of exiting the product without any additional fees or overpay their monthly mortgage payment without restriction.

Who is this product NOT intended for?

This product is not intended for customers who:

  • want or need the certainty of a fixed monthly repayment for the term of the product.

  • want a Capital & Interest repayment type.

Does this product deliver "fair value" for customers?

Being a mutual building society, all our products are priced to balance the needs of our Member savers and borrowers and the Society’s operating costs to support the Society’s long-term future.

We support our mortgage customers by providing each applicant with a bespoke, personal, and individual approach. We largely deal with people whose circumstances do not fit into the standard requirements of automated decision-making processes used by larger lenders.

We believe this product represents fair value for the customers it was designed for considering the customer support provided before, during and after the application.

Product Summary

Initial Rate

5.59% which includes a 2.51% discount from our Standard Variable Rate for 5 years, followed by our Standard Variable Rate for the remainder of the term, currently 8.10%. The interest rate for this mortgage is ‘floored’, which means that while the rate may increase, it will never fall below 2.50% during the discount period.

Fee Details

An arrangement fee of £150 applies to this product. This can be added to the loan on completion; however, this will result in interest being charged on it making the overall fee greater over the term of the mortgage.

Maximum LTV


The maximum LTV stated refers to the total maximum LTV including the current outstanding mortgage.

Loan Size

Minimum £5,000 - Maximum £750,000

The maximum loan amount refers to the maximum further advance allowed. The total loan including the existing mortgage may not exceed £1,500,000.

Mortgage Term

There is no mortgage term, and the mortgage would continue for as long as you permanently occupy the property. The mortgage would continue until the date of sale/repayment by you or the Executor of your Estate. It would only need to be repaid after a Repayment Event has occurred.

Age Restrictions

All borrowers to be at least 55 (at date of application)

No maximum age

Purpose of Advance

For improvements to the property or another reason can be discussed with us by exception.


This further advance product is portable to a new residential mortgage on a different property when the new mortgage is taken out simultaneously with the repayment of the existing mortgage. You would need to meet our credit and affordability requirements for the new mortgage, the new property would need to be acceptable to us, and approval of a new mortgage would be subject to our prevailing Lending Policy.

Repayment Method


Monthly payments of interest will be required for the period of the mortgage.

Repayment Event

A Retirement Interest-Only Mortgage is provided on the basis that the Repayment Strategy for eventual repayment of the amount owing is the sale of the mortgaged property. 

The ability to arrange a sale of the property and the repayment of the mortgage would remain within the control of the owner/borrower until a Repayment Event occurs.

This mortgage does not have a specified Mortgage Term or Repayment Date. We will only require full repayment within 6 months of a Repayment Event. A Repayment Event is defined as when:

- The property is permanently vacated, where this arises from both owners/borrowers or the final surviving owner/borrower (or the owner/borrower if it is in one name only) moving to reside in another property, or entering into sheltered accommodation or long-term care

- The date of death of the final surviving owner/borrower (or the owner/borrower if it is in one name only)


Minimum property valuation £140,000.

A Retirement Interest-Only Further Advance may only be taken if the existing mortgage is already a RIO Mortgage. If a RIO Further Advance is required, a product switch will need to be done to convert the existing mortgage.

Not permitted within 6 months of completion of the original mortgage. A valuation fee may be charged, and a credit and affordability assessment will be conducted.

Early Repayment Charge Details

No early repayment charges apply to this mortgage.

Representative Example

A mortgage of £22,072.00, payable over 17 years, on an interest-only repayment basis, with an initial payable rate of 5.59%, which includes a 2.51% discount from our Standard Variable Rate (SVR) for 5 years and then on our SVR, currently 8.10%, for the remaining 12 years. The initial term would require 60 monthly payments of £102.82, followed by 144 monthly payments of £148.99.

The total amount payable would be £50,090.76, made up of the loan amount (£22,072.00), plus interest (£27,623.76), Additional Borrowing Arrangement Fee (£150) and a Standard Valuation Fee (£245).

The overall cost for comparison is 7.50% APRC.

This is a worked example of repayments specifically relating to the further advance part only of the loan. This information may not be representative of your personal circumstances and your payments may differ from this. Representative data as of 1st January 2023.

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