Scottish Building Society Retirement Mortgage

Contributors: Nicola Date, Katherine Read. Rachel Wait & Reviewed by Francis Hui

Are You Considering the Retirement Mortgage Scheme? What are the Eligibility Requirements, Features, Interest Rates & Scheme Options? Discover If This Equity Release Plan Is For You.

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Scottish Building Society Retirement Mortgage Review

Retirement Mortgage Key Details

Type Rate APR
Scottish Building Society Fixed 3.49% 4.9%

Scheme Incentives

  • Free Valuation
  • Legal Fees Contribution

Scheme Offers

  • £150 Contribution Towards Legal Fees*
  • 3-Year Early Repayment Charges

I think you’ll agree with me when I say:

It’s REALLY hard to choose the best equity release scheme with all the choices available.

Or is it?

Is the Scottish Building Society Retirement Mortgage, equity release scheme the best?

Don’t let your equity release dream become a nightmare!

Luckily, we’re here to guide you on the ins and outs of equity release, as you deserve only the best.

However, it’s important to remember that not all plans are suited to each individual. You need to look for one that will serve your home, your lifestyle, and the reason why you’re considering equity release in the first place.

As leading experts in the field, we’ve delved into hours of research, unpacked all the equity release plans on the market (we’ve reviewed over 250 schemes!), and discovered the best in the business.

Could the Scottish Building Society Retirement Mortgage be the right equity release plan for you?
We’re here to help you:
Scottish Building Society is one of the leading equity release providers on the market and might just be the answer you’ve been looking for.
Can you truly go wrong with Scottish Building Society?

Let’s find out!

Who Are Scottish Building Society?

The Scottish Building Society is a building society based in Edinburgh, Scotland. It is the oldest building society in the world, the only independent building society based in Scotland and the 25th largest in the United Kingdom based on total assets of £431.4 million at 31 January 2020. It is a member of the Building Societies Association.
Scottish Building Society Retirement Mortgage

Scheme Background

The Scottish Building Society, Scotland’s only independent building society, offers a range of mortgages to residents of Scotland, including a residential mortgage that can help retirees borrow up to the age of 85.

This all-purpose loan can also assist people looking to raise capital to buy their rented property from the local authority or housing association.

The Scottish Building Society was formed in 1848. It has grown over the years with local mergers and still operates as a mutual. This status attributes the philosophy of careful money management and promotion of home ownership to its 30,000 members via its website and 6 building society branches.

In addition, Scottish Building Society now have a Retirement Interest-Only Mortgage (RIO) which will lend on a lifetime mortgage basis – see our RIO Mortgages Section.

Eligibility & Requirements

The Residential Mortgage from Scottish Building Society is for owner occupiers aged 18 and up till retirement. The sole requirements are that it be for a minimum of 5 years and a maximum of 40 years.

Scottish Building Society will only lend on Scottish homes to owner occupiers with sufficient and consistent income to cover their monthly interest-only or capital and interest mortgage payments.

Scottish Building Society accepts pension income as eligible income in retirement, and as a general rule, they will lend 4.5x income to single applicants, and 4.5x first income + 1x second income or 3.5x joint to joint applicants.

The overall maximum lending limit is 90% of the property value or purchase price, resulting in a £300,000 maximum loan size. The maximum loan is £350,000 for loan-to-values (LTVs) up to 80% of the property value, and £500,000 for LTVs up to 70% of the property value.

Interest-only mortgages are subject to restrictions. Only up to 75% of the property value or purchase price (whichever is smaller) is available, with a maximum loan size of £350,000. Scottish Building Society will require an appropriate repayment mechanism to be in place at the time of application, which can include an endowment policy, stocks and shares ISA, pension lump sum, or second/investment property.

For your personalized Scottish Building Society Residential Mortgage Key Facts Illustration, please call 0800 802 1051.

Scheme Features

The Scottish Building Society Residential Mortgage is essentially a mortgage that may be used into retirement that is income based and hence requires the lender to verify affordability. It can be utilized as a remortgage instrument to raise more cash in retirement for a variety of purposes.

The amount borrowed is computed using both income and property value criteria, with the maximum mortgage amount for an interest-only mortgage being up to 75 percent of the property value. The loan is secured by the property, and monthly interest-only payments must be made for the rest of the borrower’s life.

The borrowed money is subject to a 3-year fixed rate, with no early repayment penalties after that time. Monthly interest-only payments are required, which has the effect of keeping the mortgage balance constant for the duration of the plan period. Overpayments of 10% per year are permitted without penalty.

Because the Scottish Building Society is not a member of the Equity Release Council, their programs do not follow the same code of behavior as other equity release schemes, such as the no negative equity guarantee.

Scottish Building Society requires monthly interest-only payments if an interest-only payment plan is requested. As a result, the balance will remain at its current level for the length of the plan’s term. However, there is a 10% overpayment option that allows for additional payments to the lender above and above the fixed monthly amounts.
If you want to repay the mortgage in full over a set number of years, this mortgage might be structured on a capital and interest basis.

Scheme Options

The Scottish Building Society Residential Mortgage allows owner occupiers to spend their tax-free cash however they see fit, while maintaining the equity in their house through interest-only repayments.

There are a variety of 3-year discounted and 3-year fixed interest rates available, with rates determined by the loan-to-value of the mortgage and whether fee-free choices are chosen.

*For remortgages on Scottish properties, the Scottish Building Society will contribute £150 towards legal fees, and the cost of a normal mortgage appraisal will be returned upon completion. *The above rate is a 2.89 percent fixed rate for three years – home mortgage contract.

Please call the team immediately for more information or to receive a quote on the Scottish Building Society Residential Mortgages.

Editor’s Rating: 4.65

Scottish Building Society's Other Equity Release Schemes

Are you looking for a specific equity release scheme?

These are some of the schemes offered by Scottish Building Society.

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Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

rachel w

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
John Lawson

Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
kath icon

Katherine Read
Consumer Affairs Writer

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.

Nicola Date
Writer & Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

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