Later life lending continues to evolve as affordability pressures and changing retirement needs shape borrower demand, with Retirement Interest-Only (RIO) mortgages remaining a key part of the specialist lending landscape.
Thousands of older people are turning to interest-only mortgages each year amid the soaring cost of living, new figures reveal.
Retirement Interest-Only mortgages (RIOs) were introduced in 2018 to target borrowers aged 55+ who want to remain living in their home but pay less each month.
It means they only pay the interest on the loan and the full value is paid off when the customer sells the home, moves into long-term care or dies.
Now, new statistics from the Financial Conduct Authority show how 3,010 people took out a ROI last year, up from 2,743 in 2024 and 2,123 in 2023.
Richard Moring, director of RM Mortgage Solutions, who obtained the figures, said: “The soaring cost of living is putting the squeeze on homeowners of all ages as their monthly outgoings grow.
“Interest-only mortgages have been used for years by homeowners who want their payments to be cheaper, and the Retirement Interest-Only mortgages are an extension of that for people aged 55-80.
The number of pensioners that are opting for this type of product is of no surprise as they’re generally cheaper and it means the homeowner can continue to live in their home without the upheaval of moving.
Also, the term is indefinite so you don’t have to prove you can repay the capital, just the interest, allowing you to spend more money each month on other things you need or enjoy.
The downside is the property is sold when the customer dies or is placed into long-term care, which is not ideal if other members of the family living at home want to remain there.”
RM Mortgage Solutions submitted a freedom of information request to the FCA to discover the uptake of Retirement Interest-Only mortgages (RIOs).
In 2025, some 942 people aged 76+ bought the product, as well as 811 between the ages of 71-75 and 821 between 66 and 70.
While the product is generally aimed at people aged 55 and above, some lenders will offer them to people aged 50 and above, who accounted for 11 sales in 2025.
Borrowers in Scotland took out the most policies last year with 553, followed by the South West with 452 and the North West with 359.
Of the past five years, 2022 saw the most sales of the product with 3,159, while 2021 accounted for 2,743 sales.
