What is a Retirement Interest-Only Mortgage?

A Retirement Interest-Only Mortgage is a long-term loan secured against a property. It can be used to purchase a new home, refinance an existing one, or fund your retirement goals.

With this later life lending product, you are only committed to making monthly interest payments, with the remaining mortgage repaid when the last surviving homeowner dies or enters long-term care.

Who can get one?

A RIO could be the right choice for you if you:

  • Are aged 50 or over
  • Own or want to purchase a home
  • Can afford to make monthly payments to clear the interest.

Our Later Life Lending Service

Royal London is customer-owned, so you can trust that your needs are at the heart of everything we do. We take pride in offering choice and have made sure that our partners work as hard as we do when it comes to providing the very best service.

We have chosen to partner with specialist broker Responsible Life to deliver the Later Life Lending Service. They have years of experience and success in helping their customers to consider their financial options and use their property to achieve their goals.

Key features of RIO

  • Pay only the interest each month, so required payments can be lower than traditional mortgages

  • Only paid back when the last surviving homeowner dies or enters long-term care, usually by the sale of your property

  • Option to fix the interest rate.

Important things to know

  • Borrowing with a Retirement Interest-Only Mortgage will reduce the value of your estate
  • A tax-free cash injection could affect your entitlement to means-tested benefits
  • As a RIO involves making required payments to clear the interest monthly, there is a risk of repossession should you miss any
  • If your case completes Responsible Life will charge an advice fee, currently not exceeding £1,690.

Talk to our partner Responsible Life

Got a question about your later life lending options? The UK-based Responsible Life team are here to give you the information you need so that you can be sure you choose the right solution for you.

0800 023 9315

Lines are open Monday to Friday, 9am to 8pm and Saturday, 9am to 5pm, excluding bank holidays.

Or if you prefer, you can schedule an appointment for the Responsible Life Information Team to call you back.

The advice process

Speak to Responsible Life

Call the Responsible Life Information Team, based in the UK.

Consider options with an adviser

The Information Team can arrange a no-obligation appointment with a fully qualified mortgage adviser.

Make an application

Your adviser will help you through the application process and every application will receive an extra review from a second qualified expert.

Frequently asked questions about RIO

The amount that you can access with a RIO is primarily determined by the value of your property and your level of retirement income, but there will also be an affordability assessment and other checks that will help to determine it.

You must keep up with the interest payments each month. Repayment of the outstanding amount owed is only required when the last surviving homeowner dies or enters permanent long-term care. This is usually achieved with the sale of the home.

No, there is no maximum age limit on a RIO. The youngest homeowner simply needs to be aged over 50.

Yes. As you are committing to making monthly payments when you borrow with a RIO, there is a risk of losing your home if you do not keep up with them.

Yes, there are products available with interest rates that are fixed for life. There will also be options that allow you to fix the rate for shorter periods of time.

There are several costs that could be involved when considering this product option. As part of the application process, consider whether there will be related fees in having the property valued, costs charged in the engagement of a solicitor, and an application fee charged by the lender. If purchasing a property, then potential stamp duty and conveyancing fees should also be within your thoughts.

When enquiring through our Later Life Lending Service, there is also the advice fee to bear in mind. The advice fee charged will depend on the product that you choose and the complexity of your case, but the provider of our service, Responsible Life, guarantee that it won’t exceed £1,690. By charging a capped rate as opposed to a percentage of the amount borrowed, you won’t pay more simply for wanting to borrow more. The advice fee can be paid with existing funds, or you can choose to add it into the amount borrowed.

More on using your property in retirement

Looking for something different?

If you're not sure whether a RIO is for you, there are other later life lending options you could consider instead.

Royal London have chosen Responsible Life to provide our customers with advice on Later Life Lending products. The Royal London Mutual Insurance Society Limited has a 30% shareholding in Responsible Life and Responsible Lending (Responsible Group) and are part of the same group under FCA disclosure rules.

If you take out a product recommended by Responsible Life, Royal London Marketing Limited will receive a fee, for this introduction, based on a percentage of the eventual loan. If you would like further details about this fee, Responsible Life will be able to provide you with this. More information about Responsible Life and how your information is processed is available on their privacy notice. Find out how Royal London manages your personal data.

Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority, registration number 302391. Registered in England and Wales number 4414137. Registered office: 55 Gracechurch Street, London, EC3V 0RL.

Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (https://register.fca.org.uk/) under reference 610205. Responsible Life's registered office is: Mills Bakery, Royal William Yard, Plymouth, PL1 3GE. Registered in England & Wales. Company number 716225