If you're in your late 50s or older, you might assume getting a residential mortgage is no longer an option. But that’s not necessarily true.
What’s changed?
In the past, lenders required mortgages to be repaid before retirement, often leading to high, potentially unaffordable monthly payments. Today, they’re much more flexible taking into account your full financial situation, including income, assets and retirement plans.
You can now access standard mortgages well into your 70s, 80s or even 90s, depending on your circumstances. But with more choice comes more complexity, which is why speaking to a mortgage advisor is essential. The right advice can help you find the best option for your needs.
Your mortgage options in retirement
Here’s a breakdown of the main types of mortgages available to people in later life:
1. Capital and Interest Mortgage (Repayment)
- Best for: Higher earners in retirement who want to pay off the debt.
- Benefits: You repay both the loan and the interest, reducing the debt over time.
- Considerations: You’ll need a consistent income into retirement to be able to afford the payments for the duration of the mortgage term, whether this be from pension, investments or other streams.
- Common misconception: Many assume they’re too old for this type of mortgage but that’s not necessarily true anymore.
2. Retirement Interest-Only Mortgage (RIO)
- Best for: Those who want access to funds but prefer lower monthly payments.
- Benefits: Payments are lower as you only pay the interest each month and the debt remains the same so any remaining equity once the property has been sold could be inherited.
- Considerations: The debt must be repaid in full either through downsizing or when you pass away/move into long-term care.
- Use cases: Renovations, a dream holiday, assisting family, etc.
- Flexibility: Some RIOs allow partial capital repayments, giving you more control over your finances. Borrowers can also consider downsizing as an option to repay capital.
3. Equity Release (Lifetime Mortgage)
- Best for: Those who want a lump sum or additional regular income, without monthly repayments.
- Benefits: No monthly payments are required and you can ring-fence part of your property’s value to protect inheritance.
- Considerations: It can be an expensive way to raise funds. The longer you have the loan, the more the interest and debt builds up that has to be paid off when you pass away or move into long-term care.
- Flexibility: Modern equity release products offer options such as voluntary interest payments and partial capital repayments. The loan can be used for any legal purpose, including gifting to children.
While later-life mortgages offer flexibility, they do come with some potential downsides:
- Reduced inheritance: The build-up of interest over time, especially with equity release, may reduce what’s left for beneficiaries.
- Benefit impact: Receiving a lump sum could affect eligibility for means-tested benefits.
- Early repayment charges: Some products have penalties if you want to repay or exit early.
- Less flexibility: Fixed agreements may limit your options if your circumstances change.
With so many options and variables – income, estate planning, lifestyle goals and family considerations – there’s no one-size-fits-all solution. The key is understanding your needs and matching them with the right product. A good mortgage advisor will ask the right questions, explore your circumstances and guide you to the solution that works best for you.
Important Information:
Equity release and later-life mortgages can impact inheritance, benefits and carry early repayment charges. Always seek advice from a qualified, regulated adviser before proceeding. For further information visit the Money Helper website: https://www.moneyhelper.org.uk/en/homes/buying-a-home
Information correct at time of publishing (December 2025)
MS/DY/8440/12.25
