What Is a Retirement Interest Only Mortgage?

A retirement interest only (RIO) mortgage is designed for older borrowers (55+) where you pay only the monthly interest, not the capital. The loan is repaid when you die, move into long-term care, or sell the property - no separate repayment strategy needed. Unlike equity release, you make monthly payments so the debt doesn't grow. RIO suits those who want to borrow in retirement while protecting their equity for inheritance. You must prove affordability from pension or retirement income.

Learn more about equity release guide in our detailed guide.

Learn more about mortgages over 50 in our detailed guide.

Learn more about pensioner mortgages in our detailed guide.

What is a retirement interest only mortgage?

A retirement interest only (RIO) mortgage is designed for older borrowers (typically 55+) where you only pay the interest each month, not the capital. The loan is repaid when you die, move into long-term care, or sell the property. Unlike standard interest only, no separate repayment strategy is required.

How is RIO different from standard interest only?

Standard interest only requires a repayment strategy (investments, sale, etc.) and has a fixed end date. RIO mortgages have no fixed term - they continue until death, care, or sale. The repayment event IS the sale of the property, so no separate strategy is needed.

How is RIO different from equity release?

With RIO, you make monthly interest payments, keeping the loan balance stable. With equity release (lifetime mortgages), interest rolls up and compounds, so the debt grows. RIO protects more of your equity but requires affordable monthly payments. Equity release has no monthly payments.

What are the eligibility requirements for RIO?

Typical requirements: aged 55-80+ at application, own your home (or buying with significant deposit), prove you can afford monthly interest payments from retirement income (pension, investments), and property meets lender criteria. Fewer lenders offer RIO than standard mortgages.

Can I get a RIO mortgage with bad credit?

It's more difficult but not impossible. RIO lenders focus on affordability from retirement income. Some credit issues may be overlooked, especially if historic. A specialist broker can help find lenders who consider applications with adverse credit history.

What happens to a RIO mortgage when I die?

The mortgage is repaid from the sale of the property. Any remaining equity goes to your estate/beneficiaries. Your family typically has 12 months to repay (either selling the property or refinancing). They're never liable for more than the property value.

Quick Answer

How Do Retirement Interest Only Mortgages Work?

Last reviewed: December 2025

Reviewed by Jay Sabine – CeMAP Qualified – 29 years experience

You pay monthly interest only. The capital is repaid when you die, enter care, or sell. No fixed end date, no separate repayment strategy needed.

Retirement interest only (RIO) mortgages are designed for older borrowers who want to access property wealth while maintaining monthly payments. You pay the interest each month, keeping the loan balance stable. The capital is repaid from property sale upon death, moving to care, or choosing to sell. Unlike standard interest only mortgages, no separate repayment vehicle is required - the sale of the property IS the repayment strategy. Unlike equity release, you make monthly payments so the debt doesn't compound. RIO mortgages are regulated by the FCA and offered by mainstream lenders. They're suitable for: releasing equity while maintaining inheritance value, remortgaging in retirement, or purchasing a property later in life.

Your home may be repossessed if you do not keep up repayments on your mortgage. A RIO mortgage will reduce the value of your estate. Seek independent advice.

Key Points

1Monthly interest payments only
2Capital repaid on death, care, or sale
3No fixed end date or term
4Debt stays stable (doesn't compound)
5Must afford payments from retirement income
6Protects more equity than equity release

Eligibility Criteria

Typically aged 55-80+ at application
Must prove affordability from retirement income
Pension, investments, or rental income considered
Property must meet lender criteria
Maximum LTV typically 50-60%

Typical Timeframe

RIO mortgage applications take 4-8 weeks, similar to standard mortgages. You'll need proof of retirement income, property valuation, and legal work. The mortgage has no fixed term - it continues until a 'repayment event' (death, care, or sale).

Next Steps

1Calculate if you can afford monthly interest
2Gather proof of retirement income
3Speak to a specialist later life adviser
4Compare RIO vs equity release options
5Consider impact on inheritance

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Related Questions

Equity release guide

Interest only mortgages

Mortgages over 50

Pensioner mortgages

For more detailed information about this topic, visit our comprehensive guide:

Later Life Lending

Jay Sabine

CeMAP Qualified

29 Years Experience

Content reviewed: 13 January 2026

RIO vs Equity Release vs Standard Mortgage

Feature	RIO	Equity Release	Standard Mortgage
Monthly payments	Interest only	None required	Capital + interest
Loan balance	Stays same	Grows (compounds)	Reduces
Fixed term	No	No	Yes (e.g., 25 years)
Repayment event	Death/care/sale	Death/care/sale	End of term
Equity preserved	More	Less (debt grows)	Grows over time
Min age	55+	55+	18+

Who RIO Suits

Good Fit

Retired with stable pension income
Want to protect inheritance value
Comfortable with monthly payments
Remortgaging existing interest only deal
Buying/moving in retirement
Releasing equity while limiting debt growth

Consider Alternatives

Can't afford monthly payments
Want no ongoing costs (equity release)
Very limited retirement income
Prefer to pay off mortgage (standard)
Need maximum lump sum now

Example: RIO vs Equity Release

RIO Mortgage

£100,000 borrowed at 5% for 15 years

Monthly payment: £417
Total interest paid: £75,000
Amount owed at end: £100,000
If property worth £400k: £300k inheritance

Equity Release

£100,000 borrowed at 6% for 15 years (rolled up)

Monthly payment: £0
Total interest accrued: £140,000
Amount owed at end: £240,000
If property worth £400k: £160k inheritance

Illustrative example only. RIO preserves more equity but requires monthly payments.