Retirement Interest-Only Mortgages (RIO)

Looking for retirement interest-only mortgages? Discover what you need to know and how to secure the best rate

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Home Interest Only Mortgages Retirement Interest-Only Mortgages (RIO)
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Jon Nixon

Reviewer: Jon Nixon

Director of Distribution

Updated: March 15, 2024

How we reviewed this article:

Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.

March 15, 2024

If you’re recently retired or approaching later life stages, you may be looking for the best mortgage options to suit your changing circumstances. A retirement interest-only (RIO) mortgage could be exactly what you’re after.

This guide covers everything you need to know about RIO mortgages. You’ll learn where to find the best providers, things to be aware of, and alternative options to explore.

Keep reading for all the details or just click on a link below to go straight to a specific section…

What is a retirement interest-only mortgage?

This is a mortgage product aimed specifically at older borrowers. The reason being, these loans have a specific structure those in retirement will find useful. Sometimes it’s abbreviated to ‘RIO’ and it can be a useful alternative to equity release. It’s designed to benefit someone of retirement age looking to borrow against a home or remortgage onto an interest-only mortgage.

How an RIO mortgage works

It works in a similar way to a standard interest-only mortgage, except that they’re only available for those over a certain age. And, there’s no end date for the loan.

So, it’s like a lifetime mortgage in that you only have to repay the loan if you die, sell the home, or move into long-term care. But, because you’re paying off the interest as you go, you’re not eventually left with a larger level of debt.

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Benefits of these retirement mortgages

Choosing an interest-only mortgage product designed for retirement comes with some unique advantages:

  • It can be an efficient way to release equity and funds from your home without having to downsize.
  • You can keep steady and stable payments if you’ve got a current interest-only mortgage.
  • Monthly payments tend to be cheaper than a repayment or lifetime mortgage.
  • Often, you can make overpayments and reduce the total debt.
  • Interest on your loan doesn’t roll-up and accrue, preventing your debt from compounding.
  • As long as you can afford the interest payments, it means you don’t have to sell your house.
  • Potentially means you have a larger estate to pass down to your family.

Things to consider

Although RIO mortgages come with plenty of excellent benefits, there are some drawbacks to bear in mind:

  • The mortgage affordability checks can be quite strict to make sure you can afford the payments.
  • Loan-to-value (LTV) ratios can be lower than with other types of mortgages.
  • Unlike with a lifetime mortgage, your home is at risk of repossession if you don’t keep up with payments.
  • You’ll need a decent retirement income to qualify for an interest-only mortgage.

How to get an interest-only mortgage for retirement

Applying for a RIO mortgage doesn’t have to be any more complex than for a standard home loan. The smart first move is to speak with a mortgage broker who has the right level of knowledge and experience arranging these type of mortgages.

Using our free broker-matching service you can speak straight away to the right mortgage broker by simply making an enquiry online. They’ll be able to help with:

  • Downloading all your credit reports in advance of a lender’s affordability assessment (part of which involves looking at your credit history)
  • Finding the right lenders who offer RIO mortgages with the most competitive interest rates
  • Gathering all the documentation required for your mortgage application

Eligibility and affordability criteria

There are a few important areas that can impact your ability to find the best RIO mortgage available. Here’s a breakdown of some of the key factors that can make a difference:

  • Deposit and LTV: because interest-only mortgages can be a higher risk for lenders, some will have limits on the LTV they are willing to offer. Most lenders will only permit LTV ratios in the region of 50-75%. So, it’s important you deal with the lenders who’ll offer the best terms based on your deposit size or equity amount.
  • Retirement income: you’ll need to prove a stable retirement income to qualify for an interest-only mortgage. At this stage in life, your income may come from a few different sources or pensions. It’s vital that you deal with a lender who will take all your income into account because this will make it easier to get the best deal.
  • Your age: to access this specific type of mortgage, you will need to be at least 50 or 55 in most cases. Generally, the younger you are the more favourably you’ll be treated as an applicant for RIO mortgages. But this isn’t always the case. Some lenders are very happy to deal with older clients who meet the rest of their lending criteria.
  • Maximum or minimum loans: for some lenders, there will be lower and upper limits on the amount you can borrow. These limits can range from anywhere between £10,000 to £2,000,000.

RIO age restrictions

These can apply and vary amongst lenders. Most will be happy to provide interest-only mortgages for over 55s. But, chances are, as you move through older age brackets to include over 60s, 65s, and over 70s, the number of options available will diminish. However, a skilled broker will still be able to find you a mortgage no matter your age.

Examples of lenders and rates

There are quite a few lenders out there offering interest-only mortgages for pensioners. To give you an idea of the types of interest rates packages currently available take a look at our table below.

Lender Product Details
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Last updated May 2024

The above rates are purely for example purposes and were accurate at the time of writing, but are subject to change at the provider’s discretion. Speaking to a mortgage broker is the best way to find the most up-to-date deals.

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Alternative options to think about

As you approach the later stages in life, this isn’t your only borrowing option. Outside of an RIO mortgage, some other alternatives worth discussing with your broker include:

  • Lifetime mortgages: this is a common way to release equity if you’re over 55 or in retirement. The benefit is that there are no monthly payments. So you don’t have to pass an affordability assessment. But, interest can roll up and accrue, leaving you with a higher level of debt at the end.
  • Downsizing: if you’re happy to move to a smaller home or a cheaper location, you can downsize and release equity. This could also help to lower your monthly expenditure in retirement.
  • Remortgage: depending on your financial circumstances and age, it might be worth remortgaging onto a standard repayment loan that could come with cheaper rates.

Can an RIO mortgage impact your inheritance?

It can, but it may leave you in a better situation than if you used something like a lifetime mortgage. This is because you’ll be paying off the interest, therefore it won’t reduce the size of your estate.

If you do have a large estate, RIO mortgages can also work as a smart way for you to release equity and pass on some early inheritance to family members. Reducing the size of your estate in advance can leave you with a smaller inheritance tax (IHT) bill when you die.

Speak with an interest-only mortgage expert

RIO mortgages offer some excellent borrowing options for older borrowers. However, using a specialist broker will make it easier for you to find the best interest-only options in retirement as the deals on offer can vary wildly.

We offer a free broker-matching service. This means we will quickly assess your needs and then pair you up with a suitable expert. One who’ll be able to help you access the full range of choices.

Just call 0808 189 2301 or make an enquiry. We’ll set up a free, no obligation chat between you and a retirement expert who can set you up with the interest-only mortgage solution you need.


In this case, you could benefit greatly from an RIO mortgage. This is because it can help ensure that your mortgage payments are stable and affordable as you transition into retirement.

Yes, this is definitely possible. If your credit issues are older than 6 years, they may not be relevant now. For any current bad credit situations, the number of lenders available will be smaller because of the added risk. But, there are lenders who’ll review things on a case-by-case basis and still be willing to offer you an interest-only mortgage.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

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Pete Mugleston

Mortgage Advisor, MD

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