Interest Only Lifetime Mortgage: Financial Freedom?
If your current mortgage deal is ending, or you simply want to unlock your home's wealth, discover financial freedom with the growing range of interest-only lifetime mortgages in 2025
Discover the greatest level of flexibility ever known in mortgages, exclusively for the over 55s!
Author Paul Murphy
Later Life Finance Limited.

Key takeaways:
- Equity Release to repay Interest-only mortgages empowers the over 55’s with solutions the banks do not provide
- With no income checks, interest-only lifetime mortgages offer a greater chance of approval
- No deadlines to repay means less pressure
- The option to downsize when you’re ready
- No risk of default/repossession gives long term security in your home for life
Interest only Equity Release: The Solution For A Secure Retirement?
To state the later life mortgage market has evolved recently is a big understatement, following the launch of Interest only equity release plans which provide a greater level of security and freedom in retirement.
These mortgages have gradually developed to closely reflect the mortgages they are being designed to replace; interest only plans arranged in the 90’s with unsuitable repayment vehicles arranged alongside.
Lenders and funders have stepped up to the mark to provide the over 55s with the greatest range of solutions ever known for later life and interest-only lifetime mortgages.
Equity Release To Pay Off Interest-Only Mortgage?
Can you use equity release to pay off an Interest only lifetime mortgage? Yes, these modern, flexible mortgages are a type of equity release designed for homeowners over 55, providing the option of making fixed monthly payments to maintain control of the mortgage interest, but without the restrictions of a typical fixed mortgage term.
You may not be ready to move home, or simply have no desire to. You may fit into the ‘asset rich cash poor’ category-like many UK pensioners. Using the wealth in your home via an interest-only lifetime mortgage can provide a wide range of benefits.
Key benefits of interest-only lifetime mortgages include:
- Equity release to pay off interest only mortgage
- Safely release tax free equity from your home
- Make voluntary repayments which can be stopped at any time
- Avoid compound interest eroding your equity
- No deadlines to settle the mortgage by & no risk of default
- Preserve your equity for inheritance/long term care
- Security of full equity release council protection
- Stay in your home for life & plans are ‘portable’ if you wish to move later
These new mortgages have been developed in line with increased demand from homeowners with a strong desire to continuing servicing the interest payments each month on a lifetime mortgage.
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Pay Off your Mortgage
- Interest only lifetime mortgages allow homeowners over 55 to borrow against your home with the option to make voluntary repayments to preserve more of your equity. (Payments are optional).
- No income or affordability checks to qualify, and takes around 8 weeks to arrange a lifetime mortgage. We have access to the best UK equity release companies to help the process run smoothly with expertise and service.
- The money is repaid at the end of your lifetime from the sale of your home.
- To check your eligibility and how much equity you can release, try our free equity release calculator
- Borrow between 20% and 50% of your home’s value, depending on age; enhanced mortgages available for those health problems.
- Negative equity guarantee for Equity Release Council members, which ensures you and your estate are fully protected. Martin Lewis mentions this when recommending how to safely choose a lifetime mortgage provider.
- Possible to move home and take the lifetime mortgage if moving to a suitable property
- Drawdown plans available to stage the borrowing over the coming years, providing more flexibility
- Get professional advice to understand if a lifetime mortgage is suitable.
Interest Only Lifetime Mortgage: The Path To Financial Freedom?
- Remortgage onto more flexible terms
- Carry out home improvements
- Gift to family members
- Purchase a new car/motorhome
- Dream Holidays
- Cash Injection & Long-term financial security
Speak to our experts on
0800 2465228
Interest only lifetime mortgage providers
Later Life Finance are a specialist interest only lifetime mortgage broker with access to the whole mortgage market.
Our expert advisers will source the best solution for your requirements and guide you through the whole process.
Who are the best Interest only lifetime mortgage providers?
- Legal & General
- Standard Life Home Finance
- Just
- More to Life
- Pure Retirement
Other interest only lifetime mortgage providers, including Aviva and Royal London allow voluntary interest repayments on their lifetime mortgage ranges.
These interest only lifetime mortgage lenders provide options to pay 100%, 75% and 50% interest payments each month to maintain control of the interest on the mortgage.
If you don’t pay 100% of the monthly interest, there will be a proportion of compound interest accruing on the mortgage. As a broker we provide detailed illustrations showing the effect of the interest only lifetime mortgage payments.
Other lifetime mortgage lenders provide the facility to make voluntary repayments to maintain the interest, but not all lenders offer the discounted interest rates noted above.
Our interest only lifetime mortgage calculator is good starting point to access detailed interest projections.
Interest only lifetime mortgage providers
- Interest-only lifetime mortgages need settling when the property is eventually sold, so this will need to be taken into account and will reduce the size of your estate.
- Means tested benefits can be affected by having extra capital on deposit. Ensure you check your entitlements
- You will need to maintain payments if you want to avoid compound interest accruing
Our experts at Later Life Finance can help you navigate the world of interest only lifetime mortgages. Get in touch for expert advice.
Interest payment lifetime mortgages
This financial security provides the assurance of staying in your home for the rest of your life, without pressure from a lender to repay the mortgage at the end of a term.
The key difference with interest payment lifetime mortgages is they are designed for the over 55’s and do not have deadlines to settle the mortgage. In addition, payments are voluntary, which makes the plans safer than mainstream mortgages.
How are interest-only lifetime mortgage rates calculated?
Interest-only lifetime mortgage rates are based on the percentage of interest you agree to pay each month. The more interest you pay, the lower the interest rate!
For example, 100%, 75% and 50% interest payment options are available.
If you don’t pay 100% interest there will be a proportion of compound interest accruing on the mortgage. As a broker we provide detailed illustrations showing the effect of the interest only lifetime mortgage payments.
Can you release equity on an interest only mortgage?
In 2023 the equity release council added voluntary repayments without an early repayment charge to their code of conduct rules. In 2025 we are experiencing the biggest developments in lifetime mortgages since voluntary repayment options were introduced back in 2014.
Standard Life have launched an interest only lifetime mortgage following Legal & General offering an over 50’s interest only lifetime mortgage in 2023.
Livemore, a relatively new lender to the market, introduced RIO and TIO plans over the past 2 years following demand for later life mortgage lending.
Speak to our experts on
0800 2465228
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Summary
Equity Release To Pay Off Interest-Only Mortgage is becoming more popular as demand for flexible borrowing grows.
Our expert equity release advisers will provide detailed interest projections and illustrations for your consideration.
Your adviser will check if an equity release product is suitable and explain how much equity you are eligible for and compare the market to ensure you secure the best solution.
They will also explain how the lifetime mortgage interest may affect the remaining equity in your home and they should recommend you discuss your plans with any family members, if appropriate.
To find out how much equity you can borrow with a lifetime mortgage, request a call back for a detailed illustration.