Mortgage in Retirement FAQ
General information only. This is not financial advice.
Last reviewed: 2026-06-06
Can I get a mortgage in retirement?
Yes. Many lenders offer mortgages to retired borrowers assessed on pension income. Standard repayment mortgages, retirement interest-only (RIO) products, and equity release are all available. The affordability test uses your pension income in the same way lenders use employment income — the key variables are the mortgage term, the lender's maximum age at maturity, and your income level relative to the loan size.
What is a retirement interest-only mortgage?
A retirement interest-only (RIO) mortgage is designed for older borrowers who want to manage monthly outgoings without the pressure of capital repayment. You pay only the interest each month; the capital balance is repaid when the property is sold — typically on death, entry to long-term care, or voluntary sale. RIO mortgages are FCA-regulated and require a full affordability assessment using pension income. There is no fixed term, which removes the risk of needing to repay at a set date.
How do lenders assess pension income for a mortgage?
State pension and defined benefit pensions (NHS, Teachers', Civil Service) are treated as guaranteed and assessed at full value. Drawdown income from SIPPs or money purchase pensions may be discounted — typically by 20–25% — to reflect investment risk and the possibility income could reduce in future. Annuity income is treated like a salary. Having multiple pension sources generally strengthens affordability, and a specialist broker can match you to lenders who take the most pragmatic view of your income mix.
What is the maximum age for getting a mortgage?
High street lenders typically impose an upper age limit of 70 to 75 at the end of the mortgage term. Specialist and later-life lenders will often lend to 80, 85, or with no maximum age on RIO products. Age itself is not the primary test — affordability on pension income is. Borrowers in their 60s or 70s who want a shorter repayment mortgage can often access competitive rates, provided pension income supports the repayments on a compressed term.
What is the difference between equity release and a RIO mortgage?
A retirement interest-only mortgage requires monthly interest payments and is regulated as a standard mortgage. Equity release (lifetime mortgage or home reversion) typically involves no monthly payments — interest is rolled up or accrues until the property is sold. RIO mortgages generally preserve more equity than lifetime mortgages over time. However, equity release is sometimes more appropriate for borrowers with limited income who cannot sustain monthly payments. A qualified later-life lending adviser can compare both options for your situation.
Can I use drawdown income from a SIPP for a mortgage?
Yes, most later-life lenders will accept SIPP drawdown income. The amount accepted and any discount applied varies: some lenders accept the full drawdown amount, others apply a 20–25% reduction to account for the fact that drawdown income is not guaranteed. If you have recently retired and drawdown levels are not yet established, lenders may request evidence of the fund value and a statement of sustainable withdrawal strategy from your pension provider or adviser.
Risk warning
Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. This article is general information only and does not constitute financial advice.
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