Retirement Mortgages That Fit Your Plans—Not Your Age
We recently had an enquiry from an IFA who was referred to us by one of our existing partners. The client was in a strong financial position: a property worth £1.2 million and a pension pot of £920,000, with additional income from State Pensions.
At first glance, borrowing £200,000 seemed simple.
But when it comes to later life mortgages, the value of your home is only part of the story.
The Client’s Goal
The client was in his late 60s and wanted to borrow £200,000 “to buy some cars, have some fun, and hopefully reduce the size of [his] estate for inheritance tax planning.”
He didn’t want to sell investments or start drawing down more income from his pension, but he did want access to funds.
And although he was eligible for a Lifetime Mortgage, he wasn’t keen. His brother had a negative experience with equity release years ago and the memory stuck.
Modern Problems Need Modern Mortgage Options
This case was a great reminder that later life lending has evolved. While a Lifetime Mortgage wasn’t the right fit for him, there were two strong alternatives:
- Retirement Interest Only (RIO) Mortgage
- Term Interest Only (TIO) Mortgage
Here’s what made the difference:
- He could afford to service the interest payments from his pension income
- He may want to repay the mortgage in full at some point
- He didn’t want to commit to equity release just yet
What Were the Options?
A RIO Mortgage
– No fixed term
– Interest-only payments continue until death or long-term care
– Repayment comes from the eventual sale of the property
– Example: 4.99% (2-year fixed), ~£831/month on £200k borrowed
A TIO Mortgage
– Fixed term, typically 10–20 years
– Can offer lower rates than RIO
– Suits those who want more control over when the loan ends
– Example: 4.54% (3-year fixed), ~£756/month on £200k borrowed
We also spoke to his bank (Barclays), who were unlikely to help due to age-related lending criteria—even though he had banked with them for decades.
Why This Matters
This is a classic example of how borrowing in later life is about matching the product to the plan—not just the numbers on a page.
The client had the income, but needed the right structure.
He didn’t want to start drawing from his pension unnecessarily (which could increase tax) and didn’t want the commitment or implications of equity release. He just wanted a simple, interest-only mortgage with flexibility.
Outcome: Advice with Options, Not Assumptions
Ultimately, the client was presented with fully explained, affordable choices—each one clearly aligned to his goals and circumstances.
By working with his IFA, we made sure the advice complemented his wider financial plan and didn’t disrupt his pension or inheritance goals.
Thinking About a Mortgage in Later Life?
Whether you’re retired, semi-retired or just planning ahead, there are more options than you might think.
We’ll help you explore:
- Mortgages based on your pension income (even if you’re not drawing from it yet)
- Alternatives to equity release
- Ways to borrow without upsetting your tax or estate planning
Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Symmonds de Lacey is a trading name of Easy Street Financial Services Limited which is authorised and regulated by the Financial Conduct Authority. Easy Street Financial Services Limited is a company registered in England and Wales with company number 6430453. The registered office address is Basepoint, 377-399 London Road, Camberley, Surrey, GU15 3HL.
Information correct at time of writing – June 2025.
