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Retirement repayment mortgages

If you're aged 50+, a retirement repayment mortgage could help you reach your later life goals

What is a retirement repayment mortgage?

A mortgage is a loan secured against your property. Most mortgages tend to run for 25 years, but if you thought you were too old for a retirement repayment mortgage or can't find a conventional one to meet your needs, that's where our expert mortgage advisers can help.

  • Retirement mortgages are available to borrowers aged 50+

  • The loan term is based on your needs

  • It's a loan secured against your home

Mortgages can be used to buy a new property, re-mortgage an existing one, or release additional funds

Your loan amount is based on affordability, so we’ll calculate how much you can borrow based on your circumstances and see what payments you can make each month.

As a minimum, you’ll need to be able to prove your income through employment and/or pension to show you can afford the monthly repayments. One of our friendly qualified mortgage advisers can tell you if you qualify over the phone.

Types of interest rate

You will also need to think about which type of interest rate would work best for you: fixed or variable.

Fixed interest rate

A fixed-rate mortgage means your repayments will be the same for a fixed length of time, no matter how interest rates change across the market – this is normally between two to five years, though it can vary depending on the mortgage provider.

Variable interest rate

A variable interest rate means the interest rate and your repayments may go up or down depending on a number of factors. There are different variable-rate mortgages you can apply for from a number of different mortgage providers.

Retirement repayment mortgage vs retirement interest-only mortgage (RIO)

Retirement repayment and retirement interest-only mortgages both allow you to release tax-free cash from your home and are also similar in several other ways. 

For example, both are loans secured against your property, both require affordability checks and repayments are mandatory with either mortgage option.

The main difference between the two is with a RIO you only pay the interest each month, meanwhile with a retirement repayment mortgage, you can choose a mortgage option where your monthly repayment contributes towards both the capital and the interest.

As a result, the monthly repayments for a capital and interest mortgage are usually higher than that of a RIO. 

However, a RIO is designed to last for the rest of your life, while a retirement repayment mortgage has a set end date. Meaning once you reach that date, after making all of your scheduled repayments, you’re mortgage-free - allowing you to pass on more of your property wealth to your beneficiaries.

Because of this, the overall cost of borrowing for a capital and interest repayment mortgage is usually lower than that of a RIO. So, while you typically pay more monthly, in the long run, it’s usually a cheaper borrowing option than a RIO; provided you can commit to the higher monthly outgoing.

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Retirement repayment mortgage vs lifetime mortgage

Although retirement repayment mortgages share some similarities to a lifetime mortgage - both are loans secured against your home that allow you to access funds tied up in your property, tax-free - they do have some key differences.

For example, with a lifetime mortgage, there’s no affordability check or requirement to make regular repayments. But with a retirement repayment mortgage, your affordability will be assessed as you need to make monthly repayments. Your home also may be repossessed if you fail to keep up with repayments.

Nevertheless, a retirement repayment mortgage is often a cheaper way to borrow money in the long run, if you can afford the repayments.

A lifetime mortgage is also subject to compound interest, which means if you choose not to make repayments, the amount you owe can grow quickly. That's because the loan, plus compound interest, is usually repaid when the plan ends.

A lifetime mortgage is typically repaid once the last applicant passes away or moves into long-term care and the property is sold. Meanwhile, a retirement repayment mortgage comes with a set end date. And once you’ve repaid your retirement repayment mortgage, you may have more property wealth to pass on to your beneficiaries.

If you’re considering a retirement repayment mortgage, it’s important to get advice from a qualified expert. Get in touch with the team at Key today to discuss your options further.

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Why choose Key as your later life mortgage adviser?

If you're considering a later life mortgage, it's recommended you get specialist advice to make sure you find the right product for your needs. So why should you choose Key as your adviser?

We're regulated experts

Key is regulated and a proud member of the Equity Release Council

Trusted award-winners

We've had 17,000+ excellent Trustpilot reviews and won 80+ awards, including Best Later Life Broker 2022


Highly experienced

We have over 25 years' experience in helping over-55s with tailored advice on later-life products. We’ll never put you under any pressure to go ahead. If we believe an alternative product is better suited to you, we’ll tell you

Not sure what's right for you?

We can help you understand all the lending options available to you.

Speak to an adviser

Set some time aside with one of our advisers when it’s convenient for you.

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Things to consider

RIOs and later life mortgages

  • A mortgage is a loan secured against your home
  • Your home may be repossessed if you do not keep up repayments
  • You should always think carefully before securing a loan against your home
  • Our advice fee of £899 is only payable on completion

Equity release - lifetime mortgages

  • All our equity release advice relates to Key lifetime mortgages only - a loan secured against your home
  • Equity release will reduce your estate’s value and may affect your entitlement to means-tested benefits
  • A lifetime mortgage may result in limited or no property equity remaining and will reduce your financial options in the future
  • You should always think carefully before securing a loan against your home to repay existing debt
  • The loan, plus compound interest, is typically repaid through the sale of the property when the last remaining applicant passes away or moves into long-term care
  • £899 advice fee only payable on completion
Page last updated: Friday 11 August 2023