Later life lending in an evolving landscape

Our financial needs evolve over time, which means lending solutions must adapt to meet those changes. From funding essential home improvements as we grow older, to assisting family members onto the property ladder, demand for flexible lending options is growing.

According to The Generation Gap Report¹, by 2050, one in four people in the UK will be over the age of 65. This shift is already being reflected in the mortgage market with UK Finance² reporting 41,100 new loans to older borrowers in Q4 2025, totalling £6.8bn – up 20.5% compared with the same quarter a year earlier. Additionally, 388 Retirement Interest Only (RIO) mortgages were advanced during the same period, representing a year-on year rise of 13.1%.

These figures highlight both opportunity and responsibility for lenders and intermediaries, as ensuring the right solutions are available and understood will be essential to meeting future demand.

An alternative to equity release

RIO mortgages offer an alternative to equity release. Similar to lifetime mortgages, the loan is typically repaid following a life event, such as moving into long-term care or passing away. However, unlike equity release, interest is paid monthly so it doesn’t roll up, therefore protecting the remaining equity for inheritance.

Notably, RIO mortgages have no maximum term and, providing clients can individually afford the monthly interest payments, this solution could mean they can remain in their home with no need to downsize.

One example of how a RIO solution has supported borrowers in later life is Joan and Paul, both approaching 85. With their interest-only mortgage ending, and their home requiring lifestyle improvements, their options for a new mortgage were limited.

Through a RIO mortgage, they were able to transfer their existing loan, add a little extra, and continue making manageable interest-only payments. As a result, they’ve remained in the home they love and funded a stairlift to support their mobility, demonstrating how the right lending solution can have a life-changing impact.

Mortgages designed for retirement

While RIO mortgages could benefit some clients, others may prefer a more traditional loan that supports their retirement plans rather than working against them. Recognising this, the Marsden offers both Later Life and Lending into Retirement solutions.

Our Later Life mortgages are designed for clients aged 55 and over who want to borrow in retirement. They work like a conventional mortgage but with criteria suited to later life circumstances. Whilst our Lending into Retirement range supports clients aged 55+ who are approaching retirement, allowing them to plan ahead with confidence.

Ongoing support for later life clients

With an ageing population, later life mortgage solutions will only grow in importance. However, product choice alone is not enough.

For borrowers to make informed decisions and manage their mortgage responsibly, clear and ongoing communication from both lenders and intermediaries is crucial. Collaboration plays a key role in ensuring clients understand the full range of options available to them and feel confident in the choices they make.

As an example, the Marsden equips brokers with factsheets and resources to ensure that their clients get a full picture of the options available to them before committing. Once a mortgage is in place, we maintain regular communication, such as repayment reminders, to support borrowers throughout their mortgage term.

Why the Marsden?

As a specialist later life lender, our aim is to provide responsible and transparent access to financial solutions that meet the needs of those in or nearing retirement. We don’t use credit scoring, and every mortgage application is individually underwritten by a real person. This means we can look at the full picture and keep an open mind for those cases that may be a little different. 

If you have a case to discuss or would like to learn more, contact our team.

¹ State of the Nation Report: The Generation Gap - Lenvi (July 2025)

² Later Life Mortgage Lending | UK Finance (Q4 2025)