Retired? Yes. Borrowing? Absolutely.
IN Partnership with
Later life lending is outgrowing its specialist label. As more borrowers reach retirement carrying mortgage debt, lenders are broadening their criteria and the market is edging firmly into the mainstream
More
Lending to the over-55s is no longer niche. In fact, it’s becoming increasingly difficult to call it “specialist” at all. Despite continued uncertainty in the mortgage market, later life lending continues to grow quarter on quarter and year on year – a trend that fits perfectly with our focus at the Family Building Society.
In Q2 2026, lenders advanced 37,300 new loans to borrowers aged over 55, up 13.4% year on year. Lending value reached £6.2 billion, up 20.5% year on year.
Meanwhile, 5,730 new lifetime mortgages were advanced in Q2, down 1.7% year on year. The value of this lending was £490 million.
Retirement interest-only lending remains low and hasn’t experienced the growth seen in mainstream lending. There were only 323 RIO mortgages advanced in Q2, up 5.9% year on year. The value of this lending was £31 million (UK Finance).
What was once considered a specialist area is rapidly becoming part of mainstream mortgage lending as more borrowers carry mortgage debt into retirement and lenders continue to broaden their criteria.
Mortgage debt doesn’t retire at 65
More people are reaching retirement age with mortgage debt. Longer mortgage terms are becoming increasingly common as borrowers look to keep monthly payments affordable. With the average age of first-time buyers now 34 (gov.uk), many borrowers are taking out mortgage terms of 35 to 40 years, extending borrowing well into retirement.
At the same time, many homeowners are sitting on decades of accumulated housing wealth. For some, accessing a portion of this wealth forms part of a wider retirement and estate planning strategy, while others use it to support children and grandchildren with deposits or other financial needs.
Family Building Society is the UK’s 11th largest building society, with over 69,000 members and £2.7 billion of assets. A mutual organisation, owned by its saving and borrowing members, over 80% of borrowings are raised by deposits from individuals. Our mortgage products are underwritten by a team who look at each case on an individual basis based on common-sense and tailored credit checks rather than credit scoring. We’re proud to have been awarded Legendary Lender by Knowledge Bank in 2026, recognising us as a lender who consistently goes above and beyond for brokers through outstanding service, support and criteria clarity. We also have a five-star broker rating from Smart Money People.
Find out more
Brokers at the centre of SME funding
In 2023, commercial finance brokers facilitated £38 billion in lending to UK SMEs, down from £45 billion in 2022 but still historically high.
“Brokers need a funding partner that moves at the pace of small business”
Albert Gahfi,
Bizcap
Shining a light on later life
The FCA’s consultation paper CP26/18, published in June, proposes changes designed to improve access to borrowing for underserved but creditworthy customers, including older borrowers.
The proposals would give lenders greater flexibility when assessing affordability and repayment strategies, helping them better serve borrowers with complex income patterns or non-traditional circumstances while maintaining responsible lending standards.
If implemented broadly as proposed, the changes could support growth across the later life market, including RIO and interest-only lending. Proposed changes include:
Published September 21, 2026
Share
Published DD MMM 2026
“We support brokers every step of the way, from product advice to a simplified application, so clients get access to cash quickly and with confidence”
Sasha Berg,
Bizcap UK
69% of total lending from commercial lenders to smaller businesses in 2023 was conducted via their broker channels.
32% of small businesses successfully funded via NACFB members in 2023 had been previously declined for finance elsewhere.
The big four banks’ share of smaller business bank lending fell from around 63% in 2014 to a series low of 41% in 2023, as challenger banks and non-bank lenders gained ground.
Challenger and specialist banks provided 60% of gross UK SME bank lending in 2025, up from 39% in 2012, reflecting a major shift away from the big four towards newer players.
In the UK, 37% of asset finance was provided by non-bank lenders in 2023–2024, underlining the growing role of non-bank providers in SME finance.
Why non-bank and specialist lenders matter now
For a repayment mortgage, we’re able to accept borrowers up to age 95 at end of term, and can take into account earned income up to 75 (or 70 for a manual role), up to 90% of a pension or an investment pot (split over the mortgage term), as well as pension income, rental income and limited company director’s remuneration.
For interest-only mortgages, we have no minimum income requirement and no minimum equity needed in the property, take applications up to age 89 when the loan commences and accept a wide range of repayment strategies including downsizing, a pension cash lump sum and the sale of a second UK home.
Know the options, know where to place them
As later life lending evolves, advisers have more options than ever before. The challenge is knowing which solution is right and where a case is most likely to find a home. 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.
Later life lending is what we do. We were one of the first lenders to focus on older borrowers, and helping customers access suitable borrowing in retirement remains at the heart of our proposition.
When in doubt, pick up the phone
Education remains essential in a market that continues to develop. Through our Education Hub and experienced BDM team, we help brokers understand the opportunities and nuances of later life lending and support them in finding solutions for their clients.
Our award-winning BDM team works with brokers across the UK, providing support from the initial discussion through to completion. Whether it’s affordability, underwriting considerations or product suitability, we’re here to help brokers identify solutions and deliver positive outcomes for their clients.
Open-minded lending into retirement is what we do. So if you’ve got a case that doesn’t quite fit the mould, speak to your BDM. You might be surprised by what we can say yes to.
(UK Finance, Q2 2026)
How the market breaks down
37,300 mainstream loans to over-55s
5,730 new lifetime mortgages advanced
323 RIO mortgages advanced, up 5.9% year-on-year
(UK Finance, Q2 2026)
Later life lending by the numbers
37,300 new loans advanced to borrowers over 55
£6.2bn total lending value, up 20.5% year on year
Loan volumes up 13.4% year on year
Easier access to RIO mortgages The FCA plans to remove guidance that effectively requires lenders to assess whether a surviving borrower could afford a RIO mortgage on their own after the death of a joint borrower. Instead, joint RIO applications would be assessed more like standard joint mortgages. This would open up RIOs as a viable option for more couples and help older couples who are asset-rich but cash-poor.
More flexible interest-only lending Another proposed change is to broaden the acceptable repayment strategies for interest-only mortgages. This includes recognising that borrowers may later move onto a RIO mortgage or a lifetime mortgage as part of their repayment strategy. This gives greater flexibility for borrowers who have significant assets but lower earned or pension income.
Improved treatment of non-standard income The consultation also includes clearer guidance allowing lenders to take a more flexible approach when assessing irregular or variable income streams. As a manual underwriting lender, the Family Building Society is already able to consider a wide range of income sources for those approaching or in retirement, and we don’t use credit scores – recognising that older borrowers don’t always fit the traditional employment-based affordability models.
Standard mortgages over equity release
Equity release is no longer seen as a last resort. Modern lifetime mortgages offer features such as voluntary repayments, interest servicing and inheritance protection, giving customers much greater flexibility than in the past.
However, it is not always the most suitable option.
Where affordability can be demonstrated and a credible repayment strategy exists, a standard repayment or interest-only mortgage may deliver a better outcome or provide a useful stepping stone to future equity release.
At Family Building Society, we support lending into retirement through both repayment and interest-only solutions.