# What is a retirement interest-only (RIO) mortgage?

> Quick answer · Last updated 4 July 2026

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## In short

A RIO mortgage lets homeowners aged 55+ borrow against their home while paying interest monthly for life. The loan is repaid when the property is sold — usually on death or move to care — but the balance does not roll up if you keep paying interest, unlike most lifetime mortgages.

RIO mortgages were formalised in FCA rules to give retirees an alternative to equity release roll-up. You must demonstrate sustainable retirement income to cover interest — State Pension, annuities, defined-benefit pensions and investment income count.

Loan-to-value limits are typically 50%–60%, lower than lifetime mortgages at the same age. Interest rates are often fixed for five years then variable. Missing payments can lead to repossession — a stricter enforcement risk than with lifetime plans where non-payment defaults to roll-up on many products.

RIO suits borrowers who need a lump sum or ongoing drawdown and can afford hundreds of pounds monthly in interest. Compare total cost against downsizing and lifetime mortgages with voluntary interest payments.

See our equity release alternatives guide for worked comparisons.

## Related

- [Equity release alternatives](https://moneyguide.org.uk/mortgages/equity-release-alternatives-guide/)
- [Equity release basics](https://moneyguide.org.uk/mortgages/equity-release/)

## Primary source

fca.org.uk/consumers/mortgages/retirement-interest-only-mortgages

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.