As you move into retirement, your financial needs may change, and so can your mortgage options.

Many homeowners ask whether it is possible to take out an interest-only mortgage once they are retired.

The answer is yes, and there are several ways to do this, depending on your circumstances.

Through our mortgages for over 50s in Lincoln service, our mortgage advisors help clients explore flexible borrowing options well into retirement.

One of the most popular solutions is a retirement interest-only mortgage in Lincoln, which can offer a practical way to manage monthly outgoings while continuing to live in your home.

Interest-Only Retirement Mortgage Options

An interest-only mortgage allows you to pay the interest on your loan each month, with the full capital repaid when your property is sold.

Retirement interest-only (RIO) mortgages are specifically designed for older borrowers and are available beyond traditional retirement age.

This option is well suited to those who want to reduce monthly payments in later life while retaining full ownership of their home.

Many clients use a RIO mortgage to release funds for other priorities, such as home improvements, supporting family, or supplementing retirement income.

It is also worth considering a lifetime mortgage in Lincoln, which allows you to release equity from your property without making monthly repayments.

With this type of product, the loan and interest are repaid when the property is sold.

Our mortgage advisors in Lincoln can help you compare RIO mortgages with other options to find the most suitable solution.

Can I Get an Interest-Only Mortgage With Pension Income?

Yes, it is very possible to get an interest-only mortgage in retirement using your pension income.

Lenders will assess your ability to make monthly interest payments based on income from private pensions, workplace pensions, state pension, and sometimes other sources such as investments or rental income.

Our team, through the mortgages for over 50s in Lincoln service, regularly supports clients who rely on pension income.

We understand how different lenders assess affordability in retirement and can help you present your income clearly as part of the application.

Securing a mortgage based on pension income is a well-established process, and many lenders in the market are open to supporting retired applicants.

What Are the Pros and Cons of Retirement Interest-Only Mortgages?

A retirement interest-only mortgage offers several advantages.

The main benefit is affordability, since you only pay the interest each month, your monthly payments remain lower than with a traditional repayment mortgage.

You also continue to own your home, giving you the freedom to remain living there as long as you wish.

This option can also help protect the value of your estate.

Compared to a lifetime mortgage in Lincoln, where interest compounds over time, a RIO mortgage can provide greater control over how much is ultimately repaid.

It is important to be aware of the potential drawbacks.

You will need to prove that you can maintain monthly payments for the rest of your life, and lenders will carry out affordability checks based on your income and health.

If your income were to reduce or if circumstances changed, managing the mortgage could become more challenging.

Our mortgage advisors in Lincoln will take time to explain these aspects clearly and help you explore whether a RIO mortgage is the right fit or whether another solution would better suit your needs.

Date Last Edited: June 12, 2025