Retirement interest-only mortgages (RIOs), explained

How it works

A retirement interest-only mortgage is a loan secured on your home with no fixed end date. Each month you pay the interest, and only the interest. The capital is repaid when you die, move into long-term care, or sell. Because the debt never grows, the family knows exactly what will come off the sale price.

Why people choose it over equity release

• It is cheaper. Rates are closer to ordinary mortgage rates, and because you pay the interest as you go there is no roll-up. £60,000 at 5% costs £250 a month and is still £60,000 in twenty years. The same £60,000 on a lifetime mortgage at 6.2% left to roll up would be about £200,000 by then.
• It protects the inheritance.
• You can usually borrow more than a lifetime mortgage at the same age, because the lender is not waiting decades for a growing debt.

The catch

Affordability. The lender must be satisfied that you can pay the interest for the rest of your life, from pension and other income, and, for a couple, that the survivor could manage alone on one pension. Many retired people who could comfortably afford £250 a month fail this test on paper. If you do, a lifetime mortgage with voluntary interest payments does almost the same job without the test.

Who offers it

Building societies mostly, plus a few specialist lenders. Minimum age is typically 55, with no maximum. Some allow overpayments; some let you switch to a lifetime mortgage later with the same lender if the payments become hard.

Protections

RIOs are regulated mortgages, not equity release, so the Equity Release Council rules do not automatically apply. In particular there is usually no no-negative-equity guarantee (though with no roll-up it is much less of a worry), and if you stop paying the interest the lender can, in the end, repossess. Read the terms on what happens if payments are missed.

If you are 55 or over, the useful question for an adviser is: "Show me the same amount as a lifetime mortgage where I pay the interest, and as a RIO. What is the difference in rate, and what happens if I have to stop paying?"

A note on the numbers. Rates, loan-to-value limits, fees and timescales are typical figures at the time of writing (2026) and vary between lenders and with your age, health and property. This is information, not advice. Equity release must be arranged through an FCA-authorised adviser, who will give you a personalised illustration before you commit to anything.