If you have an interest-only mortgage ending soon and you are approaching retirement, you may be wondering how you are going to repay the outstanding balance.
Selling your home is not necessarily your only option.
One solution that is becoming increasingly relevant in 2026 is the Retirement Interest-Only mortgage, commonly known as a RIO mortgage.
Although RIO mortgages are still relatively unknown compared with traditional residential mortgages or equity release, the market is growing. Latest figures from UK Finance show that 323 new Retirement Interest-Only mortgages were completed during the second quarter of 2026, up 5.9% compared with the same period in 2025. The amount borrowed through RIO mortgages increased by 24% to £31 million.
So why are RIO mortgages becoming more popular, and could one be an option if your interest-only mortgage is coming to an end?
What is a Retirement Interest-Only mortgage?
A Retirement Interest-Only mortgage is a type of mortgage designed specifically for borrowing in later life.
Like a traditional interest-only mortgage, you usually pay the interest charged on the mortgage each month rather than repaying the original capital.
For example, if you borrowed £100,000 on an interest-only basis, the £100,000 would generally remain outstanding unless you chose to make capital repayments.
The important difference is what happens at the end of the mortgage.
A traditional mortgage normally has a fixed term, such as 20 or 25 years. A RIO mortgage doesn’t usually have the same fixed end date.
Instead, the mortgage can normally continue until a specified life event, such as the borrower passing away or moving permanently into long-term care. The property would then usually be sold and the mortgage repaid from the proceeds.
Is a RIO mortgage the same as equity release?
No. This is an important distinction.
A RIO mortgage and a lifetime mortgage, commonly associated with equity release, work differently.
With a RIO mortgage, you are normally required to make monthly interest payments and the lender will assess whether those payments are affordable.
With a lifetime mortgage, monthly payments are not normally compulsory and interest can instead be added to the mortgage balance, although some products allow borrowers to make voluntary payments.
This means a RIO mortgage may appeal to somebody who has sufficient retirement income to continue making monthly mortgage payments and wants to avoid interest being added to their mortgage balance.
The right option will depend on your individual circumstances.
Why are RIO mortgages becoming more popular in 2026?
There isn’t one single reason.
Instead, several changes are happening at the same time which are making later life mortgage options increasingly relevant.
1. More interest-only mortgages are reaching the end of their term
This is potentially one of the biggest reasons.
There are still hundreds of thousands of interest-only mortgages in the UK.
Unlike a repayment mortgage, your monthly interest-only mortgage payment does not normally reduce the original amount borrowed. When the mortgage term ends, you therefore need a way of repaying the outstanding capital.
For some people that might be savings, investments, pensions or selling the property.
But not everybody has a repayment plan capable of clearing the mortgage in full.
FCA research has identified significant numbers of interest-only mortgages reaching maturity over the coming years, including a smaller peak in 2027 followed by much larger numbers in 2031 and 2032.
As more homeowners reach the end of these mortgages, more people are going to be asking the same question:
What happens if my interest-only mortgage ends and I can’t repay it?
For some borrowers, a RIO mortgage could be one of the options available.
2. More people have a mortgage in retirement
Retiring mortgage-free has traditionally been the goal for many homeowners, but that isn’t the reality for everybody.
People may have bought their first home later in life, extended their mortgage term, borrowed additional money against their property or taken an interest-only mortgage many years ago.
As a result, having a mortgage beyond State Pension age is becoming an increasingly important part of the mortgage market.
In 2026, the Financial Conduct Authority launched a specific market study into lifetime mortgages and Retirement Interest-Only mortgages.
The FCA has recognised that affordability pressures and higher interest rates mean more people are likely to continue making mortgage repayments into retirement.
Mortgage lending in later life is therefore becoming less of a niche area.
3. Homeowners don’t necessarily want to sell or downsize
If an interest-only mortgage is ending and there isn’t enough money available to repay it, selling the property might seem like the obvious solution.
But that doesn’t necessarily mean it is the right solution.
Someone may have lived in their home for decades. Family and friends may live nearby. The property may already suit their needs and they may have no desire to move.
Downsizing can also involve estate agent fees, legal costs, moving costs and Stamp Duty depending on the property being purchased.
For somebody with sufficient retirement income to continue making mortgage payments, a RIO mortgage could potentially provide another option.
Rather than having to repay the mortgage by a fixed date, they may be able to continue paying the interest and remain in their home.
4. Pension income can potentially be used for mortgage affordability
Another common misconception is that mortgages become unavailable once you retire.
That isn’t necessarily true.
RIO mortgage lenders will assess whether you can afford the monthly payments, but that assessment can include acceptable retirement income.
Depending on the lender and individual circumstances, this could include income such as:
- State Pension
- workplace pensions
- private pensions
- defined benefit pensions
- certain other sources of regular retirement income.
This means somebody who is retired, or approaching retirement, may still have sufficient income to support a mortgage.
For joint borrowers, lenders may also consider what happens if one person passes away. This can include assessing how much pension income would continue to the surviving borrower.
This is one area where different lenders can take very different approaches.
5. RIO mortgages can bridge the gap between traditional mortgages and equity release
One reason I believe RIO mortgages are attracting more attention is that they provide another option within the later life mortgage market.
Later life lending isn’t simply a choice between having a normal mortgage and taking equity release.
Depending on your circumstances, potential options could include:
- extending an existing mortgage
- taking a new repayment mortgage
- taking a standard interest-only mortgage
- taking a Retirement Interest-Only mortgage
- using a lifetime mortgage
- using savings or investments
- downsizing and repaying the mortgage.
A RIO mortgage can potentially suit someone who doesn’t want a fixed mortgage end date but does have sufficient income to continue making monthly interest payments.
Can I get a mortgage after retirement?
Potentially, yes.
Being retired does not automatically prevent you from getting a mortgage.
The options available will depend on factors including your age, income, property value, mortgage balance, credit history and the type of mortgage required.
Different lenders also have different maximum ages and criteria.
This is why later life mortgage advice can be particularly valuable. A lender that isn’t suitable for one borrower doesn’t necessarily mean that borrowing isn’t possible elsewhere.
What happens if my interest-only mortgage ends and I can’t pay it off?
If your interest-only mortgage is approaching the end of its term and you don’t have enough money to repay the outstanding balance, it is important not to ignore it.
There may be several options available depending on your circumstances.
These could include speaking to your existing lender about extending the mortgage, remortgaging to another lender, switching to a repayment or interest-only arrangement, considering a RIO mortgage, exploring a lifetime mortgage or selling and moving to another property.
The important point is that reaching the end of an interest-only mortgage does not automatically mean you have to sell your home.
However, the earlier you explore your options, the more time you have to understand what may be available.
What are the disadvantages of a RIO mortgage?
RIO mortgages aren’t suitable for everyone.
Because they are interest-only, your monthly payments don’t normally reduce the amount originally borrowed.
You also need sufficient income to demonstrate that the monthly payments are affordable and those payments will need to continue.
Interest rates can change when a fixed or discounted mortgage deal ends, which could increase your monthly payments in the future.
The mortgage will eventually need to be repaid, normally following the sale of the property after a specified life event.
Keeping a mortgage against your home can also reduce the amount of equity eventually available to your estate or beneficiaries.
Other mortgage options may therefore be more appropriate depending on your circumstances.
Are RIO mortgages becoming more popular?
The latest figures suggest that more people are using them.
UK Finance reported 323 new RIO mortgages during Q2 2026, an increase of 5.9% compared with the same quarter of 2025.
Perhaps more significantly, the total amount borrowed increased by 24% to £31 million.
RIO mortgages remain a relatively small part of the overall UK mortgage market, but their relevance is increasing as more people carry mortgage borrowing into later life.
The FCA is also currently examining the later life mortgage market and has specifically identified lifetime and RIO mortgages as products that could play a greater role in meeting consumers’ changing needs.
Is a RIO mortgage right for me?
That depends entirely on your circumstances.
A Retirement Interest-Only mortgage could potentially be worth considering if:
- you have an interest-only mortgage approaching the end of its term
- you want to remain in your current home
- you have reliable retirement income
- you can afford to continue making monthly interest payments
- you don’t have another suitable way of repaying the mortgage immediately.
But it shouldn’t be looked at in isolation.
Depending on your circumstances, a traditional residential mortgage, RIO mortgage, lifetime mortgage or another solution could provide a better outcome.
Interest-only mortgage ending? Explore your options early
If your interest-only mortgage is due to end in the next few years, now could be a good time to understand your options.
You don’t necessarily need to wait until your lender writes to you or until the mortgage is only a few months away from maturity.
Understanding what you can afford, what your retirement income looks like and which types of mortgage might be available can give you much more time to plan.
I advise on both traditional residential mortgages and later life lending, which means I can look across the different options rather than starting with the assumption that one particular type of mortgage is the answer.
If your interest-only mortgage is approaching the end of its term and you’d like to understand your options, book a discovery call and we can have an initial conversation about your circumstances.
Mike Jones
Mortgage & Equity Release Broker
Mike Jones is a dedicated later life lending specialist, leading the “Mewstone Later Life Lending” service with a focus on providing personalized financial solutions for those navigating the complexities of retirement and home ownership. With years of experience in retail banking and a deep understanding of later life lending, Mike is well-equipped to guide you through critical decisions such as equity release, retirement interest-only mortgages, and more.
Releasing money from your home is a significant choice, and Mike understands the importance of ensuring you are fully informed about your options. His approach is rooted in offering unbiased, expert advice tailored to your unique circumstances. Whether you’re looking to improve your retirement lifestyle or need help planning your financial future, Mike is committed to finding the right solution for you—without any preference for particular lenders or products. His ultimate goal is to help you make informed, confident decisions that suit your long-term needs and give you peace of mind.
At Mewstone, Mike believes it’s not about “selling” a product but about finding the right fit for each individual. You can trust that, when working with Mike, the focus is always on what’s best for you and your financial future.