Later life lending in the UK is moving from specialist territory into the mainstream. Borrowers are carrying debt further into retirement, regulators are revisiting affordability rules for older borrowers, and lenders are widening their criteria to reflect the shift. This piece examines what the data show, what the FCA is proposing and how some lenders are already operating in this space.
The average age of first-time buyers in the UK is now 34, according to gov.uk. Mortgage terms of 35 to 40 years are increasingly common as borrowers seek to keep monthly payments affordable. That arithmetic pushes debt well past state pension age. Many homeowners also hold decades of accumulated housing wealth. Some access a portion of that wealth as part of a wider retirement and estate planning strategy. Others use it to support children and grandchildren with deposits or other financial needs. The combination of longer terms and rising property values means later life lending is no longer an edge case.
UK Finance data for Q2 2026 shows lenders advanced 37,300 new loans to borrowers over 55. That is up 13.4% year on year. Lending value reached £6.2 billion, up 20.5% year on year. Lifetime mortgages tell a different story: 5,730 were advanced, down 1.7% year on year, with a total value of £490 million. Retirement interest-only lending remains small. Only 323 RIO mortgages were advanced in Q2, though that figure is up 5.9% year on year, with a total value of £31 million. Standard lending to older borrowers is outpacing the specialist product categories by a wide margin.
The FCA's consultation paper CP26/18, published in June 2026, proposes changes designed to improve access to borrowing for underserved but creditworthy customers, including older borrowers. For RIO mortgages, the regulator plans to remove guidance that requires lenders to assess whether a surviving borrower could afford a RIO mortgage alone after the death of a joint borrower. Joint RIO applications would instead be assessed more like standard joint mortgages. This would make RIOs a viable option for more couples who are asset-rich but cash-poor. The proposals also broaden acceptable repayment strategies for interest-only mortgages and include clearer guidance allowing lenders to take a more flexible approach when assessing irregular or variable income streams.
Equity release is no longer seen as a last resort. Modern lifetime mortgages offer voluntary repayments, interest servicing and inheritance protection, giving customers much greater flexibility than in the past. A standard repayment or interest-only mortgage may deliver a better outcome where affordability can be demonstrated and a credible repayment strategy exists. It can also provide a useful stepping stone to future equity release. Advisers should weigh the full range of solutions before placing a case. The product that fits best depends on the client's income, assets and estate planning priorities, not on the client's age alone.
Family Building Society accepts repayment mortgage borrowers up to age 95 at end of term. Eligible income includes earned income up to 75, or 70 for a manual role. Up to 90% of a pension or investment pot, split over the mortgage term, also counts. Pension income, rental income and limited company director's remuneration are all accepted. For interest-only mortgages, there is no minimum income requirement and no minimum equity in the property. Applications are accepted up to age 89 when the loan commences. Acceptable repayment strategies include downsizing, a pension cash lump sum and the sale of a second UK home. The Society does not use credit scores.
Advisers now have more options than ever. The challenge is knowing which solution fits and where a case is most likely to find a home. Family Building Society is a manual underwriting lender that considers a wide range of income sources for borrowers approaching or in retirement without relying on credit scoring. The FCA's proposed changes, if implemented, would extend that flexibility further across the market. Advice needs to become more holistic so that clients can consider the full range of later life lending solutions before choosing the most appropriate route. Brokers seeking further analysis on this market can find specialist content in UK mortgage premium reports. Share this piece on Facebook or X.
Family Building Society's Education Hub and its BDM team help brokers understand the opportunities and detail of later life lending, from the initial discussion through to completion. Support covers affordability, underwriting considerations and product suitability. The Society is the UK's 11th largest building society, with over 69,000 members and £2.7 billion of assets. Knowledge Bank awarded it Legendary Lender in 2026, recognising it as a lender who consistently goes above and beyond for brokers through outstanding service, support and criteria clarity. It also holds a five-star broker rating from Smart Money People. Brokers with cases that do not fit standard criteria are encouraged to contact their BDM directly.