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Retirement Interest Only Mortgage Calculator

Use this retirement interest only mortgage calculator to check whether a RIO mortgage is affordable in retirement. A RIO mortgage works like an interest-only mortgage, but it is designed for older borrowers: you pay the interest each month from retirement income, and the loan is repaid when you die, move into care, or sell the property.

Calculator

Enter your figures and click Calculate.
Please note: Estimates only, not financial advice. Actual mortgage offers depend on the lender's criteria, your circumstances, and the property. Always check the current rules and speak to a qualified mortgage adviser before making a decision.

How to use this calculator

  1. Enter your property value and the loan amount you are considering.
  2. Enter the interest rate and your annual retirement income, including pensions and any other regular income.
  3. Click Calculate to see the monthly interest payment, what share of your income it takes, the LTV and the total interest over your chosen period.

Worked example: an £80,000 loan at 5.5% costs about £367 per month in interest. Against £24,000 of annual retirement income (£2,000 a month), that payment is about 18.3% of monthly income, and the total interest over 15 years is about £66,000 if the rate never changes.

Frequently Asked Questions

What is a retirement interest only mortgage?

A RIO mortgage is an interest-only mortgage for older borrowers. You pay the interest each month, the balance stays the same, and the loan is repaid on death, a move into long-term care, or sale.

How is a RIO mortgage different from a lifetime mortgage?

With a RIO mortgage you must pay the interest and affordability is checked against your income. With a lifetime mortgage there is usually no required monthly payment and interest can roll up.

What income counts for a RIO mortgage?

Pensions are the main source, but lenders may also count investment income and other regular income. The exact rules vary by lender.

What happens if I cannot keep paying the interest?

Missed interest may be added to the loan or the lender may take action, depending on the product terms. Talk to the lender and an adviser early if payments become difficult.

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