Retirement interest-only mortgages

A retirement interest-only mortgage, often called a RIO mortgage, is a loan secured on your home where you pay only the interest each month. The loan is repaid when the home is sold after the last borrower dies or moves into long-term care, so there is no fixed end date and no capital to repay in your lifetime.

The product was brought under standard mortgage rules rather than equity release rules in 2018, which is why lenders assess affordability in the usual way (FCA PS18/5, Retirement interest-only mortgages, accessed 20 Oct 2026).

Because the interest is paid as you go, the amount owed stays the same over the life of the loan. That is the main difference from a lifetime mortgage, where interest usually rolls up and the debt grows.

A RIO mortgage works like a standard interest-only mortgage with no end date. You borrow a sum against your home, pay the interest every month and keep ownership throughout. When the last borrower dies or moves into long-term care, the home is sold and the original loan is repaid from the proceeds, with anything left passing to your estate.

Rates can be fixed for a period or variable, and the monthly interest can change when a fixed period ends. Lenders set their own minimum ages and limits on how much they lend against the value, which tend to be lower than for a standard mortgage.

People use RIO mortgages to repay an interest-only mortgage that has reached its end date, to release money for home improvements or family, or to move to a new home in retirement.

Lenders check that you can afford the monthly interest from your income for the rest of your life, including pensions, investments and other regular income. They also look at what would happen if one borrower died, because the survivor's income may fall while the interest payments stay the same.

That income test is the main hurdle, and it is why RIO mortgages suit people with a secure pension who want to keep the debt from growing. Missing payments can put the home at risk, as with any mortgage.

A broker can compare which lenders offer RIO mortgages and how they assess pension income. Firms that arrange later-life lending are listed on the equity release and later-life advisers page, alongside how their fees work.

A RIO mortgage and a lifetime mortgage are both repaid from the sale of the home, but they work differently. With a RIO mortgage you pay the interest monthly and the debt stays level, and lenders check that you can afford it. With a lifetime mortgage the interest usually rolls up, the debt grows, and no income test is needed.

A RIO mortgage usually leaves more of the home's value for your estate, because the balance does not grow. A lifetime mortgage releases money without any monthly commitment, which suits people whose income is tight.

Interest-paying lifetime mortgages sit between the two, letting you pay some or all of the interest but without the same lifetime affordability test. How lifetime mortgages work is set out in the lifetime mortgage guide.

A RIO mortgage ends when the home is sold after the last borrower dies or moves into long-term care, or when you sell the home or repay the loan yourself. The estate repays the original loan from the sale, and lenders give executors a set period to arrange the sale, which is stated in the mortgage terms.

If the home sells for less than the loan, the shortfall is a debt of the estate, as with any mortgage. That is a difference from lifetime mortgages with a no negative equity guarantee, so it is worth checking how each lender handles it.

Family members who want to keep the home can repay the loan from other money or take out a new mortgage of their own, subject to that lender's checks.

RIO mortgage costs are the monthly interest, plus arrangement, valuation, advice and legal fees at the start. Rates vary between lenders and depend on the amount borrowed against the value, whether the rate is fixed or variable and the length of any fixed period, so comparing the monthly interest and the fees together gives the clearest view.

Some RIO mortgages carry early repayment charges during a fixed-rate period, and the charge usually ends when that period does. Pricing across later-life lending is set out on the equity release rates page.