Interest-only mortgages for the over 55s
Whole-of-market advice on interest-only mortgages for the over-50s and over-55s, including Retirement Interest-Only (RIO).
What is an interest-only mortgage in later life?
With an interest-only mortgage you pay the interest on the loan each month, and the amount you originally borrowed stays the same. Here is what sets it apart.
You pay the interest each month
You service the interest each month rather than letting it build up, so the amount you originally borrowed stays the same throughout the term.
Repaid later in life
The balance is usually repaid when the property is sold, when you move into long-term care, or on death.
The debt does not roll up
Because you are servicing the interest, the debt does not grow the way it can on a rolled-up lifetime mortgage.
Retirement Interest-Only (RIO) mortgages
A RIO mortgage is designed for older borrowers, typically from age 50 depending on the lender. Unlike a lifetime mortgage, a RIO is assessed on affordability: the lender looks at your income, and for joint applications at your survival income, the income that would remain if one applicant passed away. Lenders commonly work to around 4.5 times income.
You agree a monthly interest payment, and your home is at risk of repossession if you do not keep up those payments. Rates can be fixed for life, fixed for a set period of two to five years, or in some cases variable.
You can read more on our dedicated Retirement Interest-Only Mortgages page.
Read about RIO mortgagesWhole-of-market advice on interest-only mortgages for the over-50s and over-55s. Try our calculator for an indicative figure, free and with no obligation.
How is this different from a lifetime mortgage?
A lifetime mortgage is available from age 55 and is not assessed on your income. A RIO does require monthly payments but keeps your balance level. Which is right depends entirely on your circumstances, and that is exactly what our advice is for. To compare the two side by side, see Lifetime Mortgage vs RIO.
Retirement Interest-Only
Assessed on your income.
- Available typically from age 50, depending on the lender.
- You make a monthly interest payment.
- The balance you owe stays level over time.
- Assessed mainly on your income, or survivor income for joint applications.
Lifetime mortgage
No monthly payments are required.
- Available from age 55.
- No monthly payments are required, though modern plans let you pay some or all of the interest.
- Not assessed on your income.
- Carries a no-negative-equity guarantee.
Could I qualify, and what could it cost?
Your age
Interest-only later-life lending depends on your age. RIO mortgages are typically available from age 50, depending on the lender.
Your income
Because a RIO is affordability-assessed, the lender looks at the income you can evidence, and for joint applications, your survivor income.
Your property
The type and value of your home is also taken into account as part of the lender's assessment.
Your credit history
For some products, your credit history plays a part in whether you qualify and on what terms.
See what it could cost
To get a feel for how interest adds up over time, try our calculator. It is free, with no obligation and no pressure.
Whole-of-market advice
We compare across the whole of the market to find what genuinely fits you, and if a different route would serve you better, we will tell you that.
Wondering whether an interest-only mortgage fits your situation? Our adviser is happy to talk it through, free and with no obligation.
"Interest-only later-life lending depends on your age, your income and your property. There is no single answer, and we will always tell you honestly what genuinely fits your circumstances."
Interest-only mortgages, your questions answered
What is the minimum age for a retirement interest-only mortgage?
Do I have to make monthly payments on a RIO mortgage?
How is a RIO different from a lifetime mortgage?
Whole-of-market advice on retirement interest-only mortgages
For retirement interest-only, term interest-only, and interest-only mortgages for the over-50s, we provide independent, whole-of-market advice. Craig Oliver brings three decades in later-life lending and was named Best Individual Adviser at the 2018 Equity Release Awards. Your initial advice is at our cost. A fee of a maximum of £1,495 is only payable if your case completes.
A retirement interest-only mortgage is a loan secured against your home that requires monthly interest payments. If you proceed with a mortgage that requires payments to be made, your home may be repossessed if you do not keep up repayments on your mortgage. Any figures shown are an indicative guide only and are subject to a full affordability assessment and advice. Unless you decide to go ahead, our service is at our cost. Only if your case completes would our advice fee of a maximum of £1,495 be payable. Other lender & solicitor fees may apply.