If you're over 50 and want to release some cash from your home, take on a new mortgage near retirement, or remortgage an interest-only loan that's ending, you may feel like your options are limited. Many people assume equity release is the only route. It isn't.
A retirement interest-only mortgage, often shortened to RIO, sits between a standard mortgage and a lifetime mortgage. It works much like a regular interest-only loan, but with no fixed end date.
Some also use the term "lifetime interest-only mortgage", although details vary between lenders, so always check how the product works before applying.
This guide is for homeowners aged 50 and over who want to remortgage, buy a new home, or release equity without rolling up compound interest.
Your home may be repossessed if you do not keep up repayments on your mortgage.
This article is for general information only and isn't personal financial advice.
If you'd like to talk it through, a Habito mortgage adviser can help. You can also explore the wider range of types of mortgages available in the UK.
Habito is authorised and regulated by the Financial Conduct Authority (FRN 714187).
A RIO mortgage is a home loan for borrowers aged 50 or over. Lenders set their own affordability and age criteria, so the starting point varies.
Key points to know:
For the basics, see how standard interest-only mortgages work.
A RIO has two parts: The interest, which you pay monthly, and the capital, which is the loan amount itself. With a RIO, you only ever pay the interest. The capital stays the same and is repaid later.
The structure is similar to a standard interest-only mortgage, with one key difference: there's no fixed end date. The loan continues for as long as you live in the property.
The capital is repaid when one of three things happens:
Say you take out a £100,000 RIO. Your monthly interest payment depends on the interest rate available to you, and you pay that each month for as long as you live in the home. When the property is later sold, the £100,000 capital is repaid from the sale proceeds. Any surplus equity passes to your estate.
Because you pay the interest each month, the capital never grows. That protects the equity you can pass on or use yourself if you sell.
There's a flip side, though. You're committed to making that monthly interest payment for as long as you live in the property. Before taking out a retirement interest-only mortgage, consider how changes to your retirement income, health or living arrangements could affect your ability to maintain payments over the long term. Stop making payments and the lender can repossess the home. Retirement income doesn't always stay fixed, so factor in how your finances might change over a 20 or 30-year period.
These figures are illustrative only and are not guaranteed borrowing amounts. The amount you may be able to borrow depends on factors including your income, regular spending, credit history, deposit size, and lender affordability checks.
For a different approach, see lifetime mortgages and the alternative to RIO.
The criteria vary across the market, but most lenders look at the same key things.
You don't need to be fully retired to apply. Despite the name, many lenders allow working borrowers aged 50 and over to take out a RIO mortgage, provided they can show they can afford the monthly interest payments using income sources the lender accepts.
If you're still working or planning ahead for later life, it's worth understanding the rules around getting a mortgage in retirement.
Most lenders cap the LTV based on the age of the youngest borrower. In general, older borrowers can borrow a smaller percentage of their property's value.
These are typical ranges based on current lender criteria. Your actual maximum will depend on the lender, your income, and the property.
RIO rates are usually higher than rates on standard fixed-rate residential mortgages. That's because the lender may be waiting many years for the loan to be repaid. They are often lower than the rolled-up rates charged on lifetime mortgages. Rates change over time, so it's always worth checking current deals when you're ready to apply.
Watch out for arrangement fees, valuation fees, or legal costs. Compare the total cost of borrowing, not just the headline rate, before committing to a product.
The monthly interest is simple to estimate: The higher the loan amount and the higher the rate available to you, the more you pay each month. You can use the Habito mortgage comparison tool to see indicative rates, or see what you could afford with the Habito affordability calculator.
It can also help to look at current equity release interest rates for comparison.
The joint affordability test catches a lot of couples off guard. On a joint RIO application, many lenders want each borrower to individually prove they could afford the full monthly interest payment on their own retirement income. One partner may eventually die or move into long-term care, and the lender needs to know the other can still meet the payments alone.
Plenty of couples can comfortably afford the payment together, but neither could manage it alone, especially where one partner brings in most of the pension income. Some lenders apply affordability assessments based on the surviving borrower being able to maintain payments alone, which can affect eligibility for some couples.
If this affects you, there are a few possible workarounds:
Life insurance and life assurance policies are subject to terms, conditions and exclusions. A payout is not guaranteed in all circumstances, particularly if premiums are not maintained or the information provided is inaccurate.
If you're unsure which route fits, speak to a Habito mortgage adviser about your options.
Product availability and lending criteria change regularly. The lenders mentioned below are examples only and may not offer retirement interest-only mortgages at all times.
The RIO market is dominated by building societies and specialist lenders, with some high-street names also offering products.
The lender that's right for one borrower won't necessarily be right for another, which is why shopping around matters. Habito searches across a wide range of UK lenders to match your circumstances to the right RIO option.
Many borrowers in their late 50s or 60s reach the end of an interest-only mortgage term with the capital still outstanding. If that's you, you generally have four options:
In most cases, you apply to a RIO lender through a broker, the new loan pays off your existing mortgage in full, and you carry on paying the interest until the property is sold or you die.
For more on the wider process, read our guide to remortgaging your home and learn more about remortgaging to release equity.
Being declined by one lender doesn't mean you've run out of options. Usually, one specific part of your situation didn't fit that lender's criteria, and a different lender or product may work.
Common reasons for a decline include:
Don't panic if the first lender says no. Depending on why you were declined, these alternatives may be worth exploring with a broker:
A Habito mortgage broker can explore the alternatives and find which route fits your circumstances.
Because a RIO pays the interest monthly, the original loan amount stays the same throughout your lifetime. That protects more equity for inheritance than a roll-up lifetime mortgage, where the balance grows over time.
The outstanding loan still reduces the value of the estate compared with owning the property outright, because the capital borrowed must be repaid when the property is sold.
On death, the property is usually sold, or the estate can keep it and repay the mortgage another way. The outstanding RIO capital is repaid from the sale proceeds, and the remaining equity passes to the estate. That equity is then subject to standard inheritance tax rules.
Inheritance tax treatment depends on the value of the estate, who inherits it, and current HM Revenue and Customs (HMRC) rules. For example, many estates can use the nil-rate band, which allows a certain amount to be passed on before inheritance tax applies.
If a main home is left to direct descendants, an additional residence nil-rate band may also be available. Assets left to a spouse or civil partner are usually covered by the spousal exemption, meaning no inheritance tax is due on those transfers. A tax adviser or solicitor can run through the implications if this is part of your planning.
In the long run, the difference between a RIO and a lifetime mortgage comes down to what happens to the capital balance. A £100,000 RIO over 20 years keeps the capital at £100,000 throughout, so £100,000 is repaid at sale and the rest passes to the estate. A £100,000 lifetime mortgage rolled up at an indicative rate over the same period could increase significantly over time due to compound interest, depending on the interest rate and length of time the loan remains outstanding.
These figures are illustrative examples only and are not guaranteed borrowing amounts.
In practice, heirs often have around 6 to 12 months to settle the mortgage before a sale is required, subject to the lender's process. Some choose to keep the property and refinance the balance into their own mortgage.
Here are some of the questions people often ask about RIO mortgages.
A RIO mortgage requires you to pay the interest each month, so the loan balance stays the same. Equity release, usually a lifetime mortgage, lets you skip monthly payments, and the interest is added to the loan, so the balance grows over time. Both are repaid when you sell, move into long-term care, or die. RIO tends to protect inheritance better.
Most UK lenders offer RIO mortgages from the age of 50 or 55, depending on the lender. Some specialist lenders consider applications up to age 80 or older. On a joint application, the youngest borrower's age usually determines both eligibility and the maximum LTV, so a 55-year-old applying alongside a 72-year-old would normally be assessed at the younger age. There's no upper age cap on the mortgage itself, since there's no fixed end date.
On death, the property is usually sold and the outstanding RIO capital is repaid from the sale proceeds. Any remaining equity passes to the estate. Heirs typically have around 6 to 12 months to settle the mortgage before the lender requires a sale. The lender's timeline and process vary, so heirs should get in touch with them early. Some choose to keep the property and refinance the balance into their own mortgage instead.
No, a RIO is a standard interest-only residential mortgage with no end date, where you pay the interest each month. A lifetime mortgage is an equity release product where the interest typically rolls up onto the loan balance. Both are FCA-regulated, but they suit different borrowers and have different inheritance implications.
Whether you're remortgaging an existing interest-only loan, looking to release equity, or buying in retirement, a RIO could help you stay in your home while protecting more of your equity.
You can get a Habito Mortgage in Principle or speak to a Habito mortgage broker to explore your options.
Habito searches a wide range of UK mortgage lenders to help find options that match your circumstances, and the service is free to you because we're paid by lenders.
Options available to you will depend on lender criteria, affordability, and your personal circumstances.
Your home may be repossessed if you do not keep up repayments on your mortgage.
This article is based on guidance from organisations including MoneyHelper, Citizens Advice, and GOV.UK. Mortgage rules and legal processes can change, so check the latest information before acting or speak to a qualified adviser.
Information is correct at the time of writing and may change. Always check the latest terms and conditions before taking out a product.
Last updated: June 8, 2026.
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