Key facts about interest-only mortgages
- At the end of 2025, there were around 445,000 pure interest-only homeowner mortgages outstanding in the UK, plus approximately 156,000 part-and-part mortgages.
- UK Finance reported that the number of interest-only loans due to mature by 2027 had fallen to around 60,000 following borrowers repaying or changing their mortgages.
- The FCA's latest analysis shows that the largest concentration of remaining interest-only maturities is around 2031–2032. Earlier FCA data identified approximately 72,000 mortgages maturing in 2031 and 77,000 in 2032.
- The FCA subsequently projected that 2031 and 2032 together could account for around 157,500 interest-only mortgages reaching maturity.
- This is particularly relevant to older borrowers because an interest-only mortgage requires the capital to be repaid at the end of the term. If the borrower cannot repay it from savings, investments, pension funds or other assets, they may need to consider options such as remortgaging, downsizing, RIO mortgages or equity release, subject to eligibility and affordability
Frequently Asked Questions
Interest-Only Mortgage Ending – Frequently Asked Questions
What happens when my interest-only mortgage reaches the end of its term?
At the end of an interest-only mortgage, the outstanding capital is normally due to be repaid in full. If you don't have the funds available, it is important to review your options well before the mortgage maturity date.
What if I can't afford to repay my mortgage?
Don't panic, but don't ignore it. Depending on your age, income, property value and circumstances, you may have options such as remortgaging, a Retirement Interest Only (RIO) mortgage, downsizing or equity release.
Can I remortgage an interest-only mortgage?
Potentially, yes. A lender will assess your circumstances, including income, affordability, age, credit history, property value and how you intend to repay the capital.
What is a RIO mortgage?
A Retirement Interest Only mortgage allows you to continue paying the interest on your mortgage without necessarily having to repay the capital during your lifetime. The mortgage is generally repaid when the property is sold, following death or when you move into long-term care, subject to the lender's terms.
Could equity release repay my interest-only mortgage?
For some homeowners, equity release may be an option for repaying an existing mortgage. However, it is a significant financial decision and isn't suitable for everyone. The impact on your estate, benefits and future finances should be carefully considered.
How much equity do I have in my home?
Your equity is broadly the difference between your property's current value and the amount you owe on your mortgage and other secured borrowing.
Do I need to wait until my mortgage expires before looking at my options?
No. In fact, planning early is strongly recommended. Reviewing your circumstances several years before maturity can give you more options and time to consider the most appropriate solution.
Can I stay in my current home?
Potentially. Later-life lending can sometimes allow you to remain in your existing home rather than having to sell and move, depending on your circumstances and the solution available.
Will I have to prove my income?
This depends on the type of lending you're considering. Traditional mortgages and many RIO mortgages involve affordability assessments, whereas equity release works differently. Your adviser can explain the requirements for each option.
What if I'm retired?
Being retired does not automatically prevent you from obtaining mortgage or later-life lending. Pension income and other sustainable income sources may be considered, depending on the lender and product.
When should I speak to a specialist adviser?
Ideally, as early as possible. If your interest-only mortgage is due to mature within the next five years, now is a good time to review your options rather than waiting until the mortgage becomes due.
A strong call to action
Is your interest-only mortgage coming to an end?
Don't leave it until the last minute. Talk to a specialist later-life lending adviser and understand your options early. Whether you're considering a conventional mortgage, RIO mortgage or equity release, we can help you explore the options available based on your individual circumstances.