Retirement Interest-Only Mortgage: Lenders, Rates and Criteria (2026)
By Jake Stott, Knox Mortgages. Reviewed by an adviser authorised under Fort Advice Bureau, FCA FRN 972730. Published 25 September 2026. Last reviewed 25 September 2026.
A retirement interest-only mortgage (RIO mortgage) is a mortgage for homeowners usually aged 55 or over where you pay only the interest each month and the loan has no fixed end date. The capital is repaid when the last borrower dies, moves into long-term care or sells. Lenders approve it on pension income, testing whether the survivor could still afford the payments alone.
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Book a free discovery callThis page does what the lender and comparison pages ranking for this topic do not. It puts the main RIO lenders side by side with their published age, loan-to-value and income rules, shows real dated rates, works through the surviving partner test with actual numbers, and explains clearly where a RIO ends and equity release begins. Knox Mortgages advises on regulated mortgages, including RIO. We do not advise on lifetime mortgages or other equity release, and we say so plainly below where that matters.
How does a retirement interest-only mortgage work?
A RIO works like a standard interest-only mortgage with one key difference: there is no term. You borrow a lump sum against your home, pay the interest every month for as long as you live there, and the capital stays the same throughout. Nothing has to be repaid on a set date. The loan is cleared from the sale of the property when the last borrower dies or moves permanently into long-term care, or earlier if you choose to sell or repay.
Because the monthly interest is paid, the debt does not grow. That is the fundamental difference from a lifetime mortgage, where interest usually rolls up and compounds. Most RIO rates are fixed, either for 2, 5 or 10 years and then reviewed, or for life. Legal and General, for example, fixes the rate for the whole life of the mortgage.
RIO has been a regulated mortgage in its own right since March 2018, when the FCA brought it under standard mortgage rules in policy statement PS18/6. That means the lender must assess whether you can afford the interest, but it does not need a separate repayment plan, because the sale of the house is the repayment plan.
Who can get a RIO mortgage?
You can usually get a RIO if you are at least 55, own your main home in the UK, have enough equity, and have reliable retirement income that covers the interest now and after one of you dies. Some lenders go lower on age: LiveMore starts at 50, and will accept a joint borrower as young as 45. Perenna also lends from 50.
The four tests every RIO lender applies are age, equity, income and property. Age sets the floor, and at some lenders the ceiling (Leeds Building Society caps at 80, Legal and General at 90 at application). Equity is capped by a maximum loan-to-value, typically 50% to 60%, and up to 75% at LiveMore. Income must cover the interest on a sustainable basis, usually from state, private or workplace pensions, annuities and sometimes rental or investment income. Property must be your main residence, above the lender’s minimum value, and of standard construction. Flats, ex-local authority homes and short leases narrow the lender list.
Which lenders offer retirement interest-only mortgages, and what are their criteria?
RIO is mainly a building society and specialist later life lender product, not a high street bank one. The table below shows published criteria we checked on each lender’s own website in September 2026. Criteria change, so treat this as a starting map rather than a guarantee.
| Lender | Minimum age | Maximum age | Max LTV | Loan size | Income rules |
|---|---|---|---|---|---|
| Legal and General | 55 | 90 at application | 60% | £10,000 to £2,000,000 | Up to 8.5 times income; assessed on the income of the lowest earner. Min property value £70,000 (£100,000 for flats, maisonettes and ex-council) |
| Leeds Building Society | 55 | 80 | 55% | Up to £2,000,000 | Must show lifetime affordability on current and future income |
| Nottingham Building Society | 55 | Not stated | 60% | Not stated | Maximum 2 applicants; earned income excluded; guaranteed transferable income counts; must stay affordable if the highest earner dies |
| Scottish Building Society | 55 (both applicants) | Not stated | 50% | £30,000 to £300,000 (up to £500,000 by exception) | 4.5 times income, sole and joint |
| LiveMore | 50 (youngest joint borrower 45) | No maximum | 75% | Not stated | Working or retired income considered |
| Perenna | 50 | Not stated | 60% (on its RIO page) | Not stated | Long-term fixed rate lender; independent legal advice required where the oldest applicant is 70 or over |
Two names people expect to see are missing for good reasons. Nationwide was the first major lender to launch a RIO in April 2019 (55 and over, apply before 85, maximum 50% LTV, pension income required), but its current intermediary interest-only criteria page does not list a RIO, so check it is still available before relying on it. Santander and Halifax publish standard interest-only criteria, not a dedicated RIO: Halifax requires the interest-only term to end by 70 and income of at least £75,000 sole or £100,000 joint. Hodge’s Resi Retire is a term mortgage with an end date, not a RIO. more2life and Pure Retirement are lifetime mortgage lenders, which is equity release, not RIO.
How much can you borrow on a RIO mortgage?
How much you can borrow on a RIO is set by whichever is lower: the lender’s loan-to-value cap on your home, or the amount your income can support in interest. On a £400,000 home, a 50% LTV lender caps you at £200,000, a 60% lender at £240,000 and a 75% lender at £300,000.
Income is usually the tighter limit for couples. Lenders either apply an income multiple (Scottish Building Society uses 4.5 times, Legal and General goes up to 8.5 times) or run an affordability model that tests the interest payment against net income and spending. Critically, most test the income of the lowest earner or the survivor, not your joint income today. A couple on £43,000 a year between them may only be assessed on £22,250 if that is what one of them would have left.
Minimum loans also apply. Legal and General starts at £10,000 and Scottish Building Society at £30,000. If you only need a small amount, that narrows the list.
Worked example: using a RIO to clear an interest-only mortgage that is ending
This is the most common reason people search for a RIO. Here is the arithmetic on a typical case.
The couple: Mr and Mrs A, aged 68 and 66. Home worth £400,000. Interest-only mortgage of £120,000 with a high street lender, term ending in 6 months, no repayment vehicle. The lender will not extend because they are past its maximum age.
Their income (gross, per year): Mr A has a state pension of about £12,500 and an occupational pension of £16,500 with a 50% spouse’s pension. Mrs A has a state pension of about £12,500 and a £1,500 annuity. Joint income: £43,000.
| Step | Calculation | Result |
|---|---|---|
| Loan-to-value | £120,000 ÷ £400,000 | 30%, inside every lender’s cap |
| Annual interest at 5.54% (Leeds 5 year fix, 24 Sep 2026) | £120,000 × 0.0554 | £6,648 |
| Monthly payment | £6,648 ÷ 12 | £554 |
| If Mr A dies first, Mrs A’s income | £12,500 + £1,500 + (£16,500 × 50%) | £22,250 |
| If Mrs A dies first, Mr A’s income | £12,500 + £16,500 | £29,000 |
| Lowest surviving income | Lower of the two | £22,250 |
| Interest as a share of that income | £6,648 ÷ £22,250 | 29.9% |
| Borrowing at 4.5 times survivor income | £22,250 × 4.5 | £100,125, short by £19,875 |
| Borrowing at 8.5 times survivor income | £22,250 × 8.5 | £189,125, enough |
The lesson: the same couple fails at a lender using a 4.5 times multiple on the survivor’s income and passes at one allowing up to 8.5 times, subject to its full affordability check. That is why lender choice matters more than rate on RIO. It also shows why paying off £20,000 from savings first, or choosing a lender that models net income rather than a flat multiple, can be the difference between a yes and a forced sale.
What are RIO mortgage rates in 2026?
RIO rates sit above mainstream residential rates. In September 2026 published RIO fixes run from about 5.5% at building societies to around 7.4% for a rate fixed for life at a specialist. The table below shows rates taken from lender websites on 24 and 25 September 2026.
| Lender | Product | Rate | Fee |
|---|---|---|---|
| Leeds Building Society | 2 year fixed | 5.54% (APRC 7.7%) | £999 |
| Leeds Building Society | 2 year fixed | 5.64% | None |
| Leeds Building Society | 5 year fixed | 5.54% (APRC 7.2%) | £999 |
| Leeds Building Society | 5 year fixed | 5.69% | None |
| LiveMore | 5 year fixed | From 6.90% | Varies |
| LiveMore | 10 year fixed | From 7.09% | Varies |
| LiveMore | Fixed for life | From 7.44% | Varies |
| Perenna | Long-term fixed RIO | From 5.84% (as stated on its consumer site, date not shown) | Varies |
The trade-off is certainty against cost. A short fix is cheaper today but exposes you to whatever rates are when it ends, at an age when your income is fixed. A rate fixed for life costs more but the payment never changes. Watch the early repayment charges on lifetime fixes: Legal and General’s RIO charges 9% of the balance in the first 5 years, stepping down to 1% in years 13 to 15, although it waives the charge on death, care and certain downsizing moves. If you want certainty over a long period, our guide to long-term fixed rate mortgages covers the wider market.
How is a RIO different from a lifetime mortgage and a standard interest-only mortgage?
A RIO sits between a standard interest-only mortgage and a lifetime mortgage. It has no end date, like a lifetime mortgage, but you must pay the interest monthly and pass an affordability test, like a standard mortgage. A lifetime mortgage is equity release: interest usually rolls up, there is no income test, and the debt grows.
| Feature | Standard interest-only | Retirement interest-only (RIO) | Lifetime mortgage (equity release) |
|---|---|---|---|
| End date | Fixed term, usually ending by 70 to 75 at high street lenders | None; repaid on death, long-term care or sale | None; repaid on death or long-term care |
| Monthly payments | Interest, required | Interest, required | Optional; usually none |
| Does the debt grow? | No | No | Yes, if interest rolls up |
| Affordability test | Yes, plus a repayment strategy | Yes, including the survivor’s income | No income test |
| Typical max LTV | Up to 75% at mainstream lenders | 50% to 60%, up to 75% at a few | Based on age; often 20% to 55% |
| Risk if you stop paying | Repossession | Repossession | No repossession for non-payment on roll-up plans |
| Who advises | Mortgage adviser | Mortgage adviser, including Knox | Specialist equity release adviser only |
If you cannot afford monthly interest, or do not want the commitment, a RIO is the wrong product and a lifetime mortgage may be worth exploring. That needs a specialist equity release adviser, which Knox is not. Our explainer on how equity release works sets out the basics, and the equity release horror stories piece covers what goes wrong when it is sold badly.
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Book a free, no-obligation discovery call. A Knox broker will answer your questions, tell you straight what is realistic for your situation, and explain the next step. No pressure and no sales pitch.
Book a free discovery callWhat does a RIO cost your estate compared with a lifetime mortgage?
A RIO preserves far more of your estate because the balance never grows, but you pay for that through monthly interest. Using the same £120,000 over 15 years:
- RIO at 5.54%: balance after 15 years is still £120,000. Interest paid over that time is £6,648 × 15 = £99,720, assuming a similar rate on each refix.
- Roll-up lifetime mortgage at an illustrative 6.00%: balance after 15 years is £120,000 × 1.0615 = £120,000 × 2.3966 = £287,587. Nothing paid monthly.
On a £400,000 home with no price growth, the RIO leaves £280,000 of equity in the estate against £112,413 on the roll-up plan. The RIO household spent £99,720 on interest to protect £167,587 of equity. For most people with the income to pay, the RIO wins on cost. The lifetime mortgage figure is illustrative only; we do not quote or recommend equity release products.
What happens to a RIO mortgage when one partner dies or goes into care?
When one joint borrower dies or moves into long-term care, the RIO carries on in the name of the remaining borrower. Nothing has to be repaid and the rate does not change. The survivor keeps paying the monthly interest from their own income, which is exactly why lenders test the survivor’s income at the start.
The loan becomes repayable only when the last borrower dies or moves permanently into care. The property is then normally sold by the estate or attorney, the mortgage is cleared, and the rest goes to your beneficiaries. Lenders typically allow a set period for the sale; check the exact wording in your offer. Legal and General waives its early repayment charge when repayment follows death or long-term care, and also where the surviving joint borrower repays within 3 years of the first borrower dying or going into care.
Two protections worth considering. First, both names should be on the mortgage and the deeds, otherwise a partner who is not a borrower may have to move out. Second, if a pension stops or halves on a death, life insurance can pay off part of the loan so the survivor’s payments stay affordable.
Can you move house or borrow more with a RIO?
Yes, most RIOs are portable, subject to the new property meeting the lender’s criteria. If you downsize, you may need to repay part of the loan to stay within the maximum loan-to-value, and some lenders waive charges on that partial repayment. Legal and General lets you repay in full without an early repayment charge after 5 years if you move to a property it will not lend on. It also considers additional borrowing 6 months after completion, subject to affordability.
Overpayments are usually allowed within limits, commonly up to 10% of the balance a year without a charge. Paying down capital when you can reduces the interest and protects the estate. If you would rather raise money from your home on a conventional basis while you still meet mainstream age limits, compare this with remortgaging to release equity.
Is a RIO right for you?
A RIO is usually right if you want to stay in your home, have reliable pension income that covers the interest even after one of you dies, and want to protect as much of your estate as possible. It is usually wrong if your income is too tight to pay interest every month, if you plan to downsize within a few years, or if you have savings that could clear the debt more cheaply.
Check three things first. Could the survivor pay the interest comfortably on their own income, with room for rising bills? Would repaying some of the loan from savings, or downsizing, be cheaper than paying interest for 20 years? Could a mainstream remortgage on a repayment or part-and-part basis work while you are still within high street age limits? Also consider means-tested benefits: releasing a cash lump sum can reduce entitlement to benefits such as Pension Credit if the money sits in savings.
Why do RIO applications get declined, and how do you fix it?
Most RIO declines come down to the survivor’s income, the property or the loan-to-value, not the applicant’s age. The fix is usually a different lender rather than a different product.
| Reason for decline | Why it happens | The fix |
|---|---|---|
| Survivor income too low | Lender tests the lower of the two single incomes, not joint income | Use a lender with a more generous model or higher multiple, reduce the loan from savings, or check spouse’s pension entitlements are evidenced |
| Loan-to-value too high | Many lenders cap at 50% to 60% | Move to a 60% or 75% lender, or reduce the loan |
| Earned income ignored | Some lenders, such as Nottingham, exclude employment income | Use a lender that counts earned income, or wait until pension income is in payment |
| Borrower too young | Most lenders need both applicants to be 55 | Use a lender that accepts a younger joint borrower, such as LiveMore from 45 |
| Property type | Flats, ex-council homes and short leases; Legal and General needs lease term plus youngest age to total at least 175 | Pick a lender that accepts the property, or extend the lease first |
| Property value too low | Minimums such as £70,000, or £100,000 for flats at Legal and General | Choose a lender with a lower minimum |
| Arrears on the current mortgage | Recent missed payments suggest the interest is not affordable | Evidence 6 to 12 months of clean payments and explain the cause |
| Loan too large for the lender | Scottish Building Society caps at £300,000 as standard | Use a lender with a £2,000,000 ceiling |
Case study: widow facing the end of an interest-only term
Illustrative and anonymised, based on the type of RIO case we handle.
Mrs B, 71, was widowed two years ago. She had £85,000 left on an interest-only mortgage with a high street lender, due to end in 4 months. The lender would not extend because she was over its maximum age, and she had no savings to repay it. Her home was worth £310,000 and her income was a state pension plus a widow’s occupational pension, £19,800 a year in total.
The loan-to-value was 27.4% (£85,000 ÷ £310,000). On a 5 year fix at 5.69% with no fee, the interest is £85,000 × 0.0569 = £4,836.50 a year, or £403 a month, which is 24.4% of her gross income. As a sole borrower there was no survivor test to pass, so affordability was assessed on her income alone. The RIO cleared the old mortgage before its term ended, her payment stayed close to what she was already paying, and she stays in her home with no end date. We also discussed whether her children could help clear part of the balance to reduce the interest; she chose not to.
How Knox helps with a retirement interest-only mortgage
We compare RIO lenders across the market, run the survivor affordability test before you apply, and pick the lender whose rules fit your income, property and plans. If your current interest-only term is ending, start at least 6 months before the end date: RIO applications take longer than a standard remortgage, and a lender is more flexible about a short extension while a new mortgage is in progress. If a lifetime mortgage or other equity release looks more suitable, we will tell you and point you to a specialist equity release adviser rather than advise on it ourselves.
Frequently asked questions
Are retirement interest-only mortgages a good idea?
They can be, if you have reliable pension income that covers the interest even after one partner dies and you want to stay in your home. A RIO keeps the debt level, so it protects more of your estate than a roll-up lifetime mortgage. It is a poor fit if payments would stretch your budget or you plan to move soon.
Can you get an interest-only mortgage if you are retired?
Yes. A retirement interest-only mortgage is designed for retired borrowers, usually from age 55, and is assessed on pension income. Standard high street interest-only mortgages normally need the term to end by around 70, which is why RIO exists as a separate product.
Which lenders do retirement interest-only mortgages?
Mainly building societies and later life lenders. In September 2026 that includes Legal and General, Leeds Building Society, Nottingham Building Society, Scottish Building Society, LiveMore and Perenna. Nationwide launched a RIO in 2019 but its current intermediary criteria do not list one. Santander and Halifax publish standard interest-only criteria rather than a dedicated RIO.
What happens to a RIO mortgage when one partner dies?
The mortgage continues in the name of the surviving borrower on the same terms. Nothing has to be repaid until the last borrower dies or moves into long-term care. That is why lenders check at the start that the survivor’s income alone would cover the interest.
Is a RIO mortgage the same as equity release?
No. A RIO is a regulated residential mortgage with monthly interest payments and an affordability test. Equity release, such as a lifetime mortgage, usually has no monthly payments and the interest rolls up. Knox advises on RIO but not equity release, which needs a specialist equity release adviser.
How much can I borrow on a retirement interest-only mortgage?
Usually up to 50% to 60% of your home’s value, and up to 75% at a few lenders such as LiveMore, limited by what your income can support. Legal and General lends up to 8.5 times the lowest earner’s income; Scottish Building Society uses 4.5 times. Minimum loans start at £10,000.
What are RIO mortgage rates in 2026?
In September 2026 published RIO rates run from about 5.54% (Leeds Building Society 2 and 5 year fixes with a £999 fee) to around 7.44% for a rate fixed for life at LiveMore. Your rate depends on the loan-to-value, the fix length and the fee you choose.
Can I move house with a RIO mortgage?
Yes, most RIOs are portable if the new home meets the lender’s criteria. If you downsize, you may need to repay part of the loan to stay within the maximum loan-to-value. Legal and General waives its early repayment charge after 5 years if you move to a property it will not lend on.
Ready to find out which RIO lender fits your income and home? Book a free discovery call and we will run the survivor affordability test before anything is submitted.
Sources: lender product and criteria pages for Legal and General (including RIO product summary), Leeds Building Society, Nottingham Building Society, Scottish Building Society, LiveMore, Perenna, Nationwide, Halifax and Hodge, checked 24 to 25 September 2026; FCA PS18/6 (March 2018). State pension figures are rounded. Rates change daily and are shown for illustration.
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