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24 January 2026
Hub page introduction, criteria and FAQs added
12 December 2024
First Published
A quick overview of retirement interest-only mortgages
While a lifetime mortgage is the most popular type of equity release in the UK, Retirement Interest-Only (RIO) mortgages are a distinct alternative. They allow homeowners, typically over the age of 55, to borrow against their property, but unlike lifetime mortgages, they require monthly interest payments. The loan balance is usually not repaid until they die or enter long-term care.
You can read more about them in our complete guide to retirement interest-only mortgages.
Key features of RIO mortgages
Here are the main features of RIO mortgages that distinguish them from regular home loans and lifetime mortgages:
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They are specifically designed for older borrowers.
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There are mandatory monthly interest payments (unlike lifetime mortgages where there are no mandatory payments).
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You must prove affordability to ensure you can meet the monthly payments.
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You must be a homeowner to qualify).
Eligibility criteria and other requirements
To qualify for a RIO mortgage you generally need to be a homeowner over the age of 55. This table shows the typical lending requirements for these mortgages at a glance.
|
Criteria |
Requirement |
|
Minimum Age |
You must be 55 or older (based on the youngest applicant). |
|
Property Ownership |
You must own your home or be using the mortgage to purchase one. It must be your main residence. |
|
Affordability |
Unlike lifetime mortgages, you must prove you can afford the monthly interest payments from your pension or income. |
|
Maximum Loan-to-Value (LTV) |
Typically higher than equity release, often up to 60-65% (varies by lender). |
|
Minimum Property Value |
Your property must usually be worth at least £70,000 - £80,000. |
|
Property Type |
Restrictions often apply to ex-council flats, sheltered housing, or properties of non-standard construction. |
|
Location |
Most lenders require the property to be on the UK mainland. |
|
Minimum Loan Size |
Lenders typically have a minimum loan amount of £10,000. |
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FAQs
No, the money you release through a mortgage is a loan, not income, so it is tax-free17. However, if you place the funds into a savings account, the interest you earn on that savings might be taxable.
Setting up a RIO mortgage typically involves a valuation fee, solicitor’s fees, and an advice fee19. Some lenders may also charge an arrangement fee. Your advisor will provide a full illustration of these costs before you proceed.
Because RIO mortgages require mandatory monthly payments, your home may be at risk of repossession if you fail to keep up with them. This is a key difference from lifetime mortgages.
There are several alternatives including lifetime mortgages, home reversion plans, and standard mortgages with flexible age limits. Speak to a later life lending adviser for a full review of which product is the best fit for you.
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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
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