Hundreds of thousands of older borrowers could bring new responsibilities for mainstream mortgage advisers
Lenders advanced 37,300 loans to borrowers aged 55 and over in the second quarter, according to UK Finance. That was 13.4% more than a year earlier, with the value of lending reaching £6.2bn, up 20.5%.
UK Finance head of analytics James Tatch said the annual comparison reflects the temporary dip in activity following last year's stamp duty changes. Buyers had rushed to complete before the April 2025 changes, which depressed Q2 2025 volumes.
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Lifetime mortgages dip
Lifetime mortgages did not share in the annual uplift. UK Finance's figures show:
- 5,730 new lifetime mortgages, down 1.7% year on year but 8% higher than in the first quarter, worth £490m
- 323 retirement interest-only (RIO) mortgages, up 5.9% year on year, with value up 24% to £31m
For comparison, the Financial Conduct Authority (FCA) reports that around 27,000 lifetime and 3,000 RIO mortgages were advanced across 2025. These were worth £2.16bn and £282m respectively.
The share of the wider market also eased. Later life loans made up 7.8% of residential lending, down from 7.95% a year earlier. In buy-to-let, the share fell to 20.6% from 22.5%.
Demand drivers
Knight Frank Finance head of later-life finance David Forsdyke said higher rates are prompting questions from older borrowers. Many want to know how they can manage mortgage payments in retirement, particularly when an interest-only term ends.
He added that older homeowners are no longer limited to a traditional lifetime mortgage. He said the wider later life market has evolved considerably over the past seven years.
Equity Release Council chief executive Jim Boyd said the figures show the market continuing to develop as housing wealth becomes more important to retirement planning. He also pointed to the FCA's description of later life lending as a potential fourth pillar of retirement funding, alongside pensions, savings and investments.
FCA's broker focus
The FCA's terms of reference for its later life mortgages market study set out the role intermediaries play in these products. According to the regulator:
- more than 90% of lifetime mortgages and at least 60% of RIO mortgages sold over the past three years went through an intermediary
- about 6% of standard mortgage sales in each of the last five years were to borrowers aged 55 or over whose terms run to age 68 or beyond
- that equates to roughly 350,000 sales since 2021
Lifetime mortgage customers must receive advice, the FCA said, while around one in ten RIO customers proceed on an execution-only basis. The median age of customers is around 71.
The regulator noted that government analysis suggests 43% of people are under-saving for retirement. It added that over-55s hold an aggregate £3.7tn of UK property wealth, as of 2022, and that lifetime and RIO mortgages could play a greater role.
The FCA said its work may extend to standard mortgage brokers, even where they do not advise on lifetime or RIO products. This is because they can refer customers to an adviser who does.
The FCA aims to publish a progress update on the study by the end of 2026. It is also reviewing its RIO affordability guidance, which stakeholders have described as a significant barrier to entering the market.
The regulator is developing policy on holistic advice alongside the study. Given the 350,000 sales since 2021, firms may want to identify clients whose interest-only deals are maturing or whose terms run beyond retirement.
Specialist and mainstream advisers also remain divided, leaving some older homeowners at risk of missing suitable products.
