Borrowing after age 55: secured loan options

The shifting landscape of later life borrowing

Later life lending is no longer a niche. In Q1 2025, lenders advanced 38,510 new loans to borrowers aged 55 and over in Great Britain, a 33.5% annual rise, with total lending hitting £6.1 billion, up 42.6%. Later life mortgages now represent 7.6% of all residential loans, and more than one in five buy-to-let loans go to this age group. The pattern is clear: secured borrowing is becoming a mainstream tool for older adults managing retirement finances.

Why the surge? Partly property wealth, partly inflation and lifestyle pressures. Over-55s are pivoting away from unsecured credit, with unsecured balances contracting by about 19%, and towards products secured on homes that often deliver lower rates and longer terms. Lifetime mortgages grew 11.1% in Q1 2025, unlocking £530 million, while Q2 saw £636 million of equity release taken by 14,404 customers, despite economic headwinds. Retirement interest-only lending is stable, dipping slightly by 2.6% in Q2 to £25 million but remaining relevant for cash flow management.

At the same time, lending policy has adapted. Many UK lenders now consider borrowing past age 75, sometimes with no set upper age, using pension income, investments and rental receipts in affordability checks. That flexibility is welcome, but it increases the range of choices and the complexity of trade-offs around interest roll-up, inheritance, means-tested benefits and early repayment charges.

Understanding APR is not just percentages - it is what you will pay in real money over time.

A note of caution on unsecured borrowing: 16% of UK personal loan applications come from over-55s, and a quarter exceed £15,000. Fixed repayments can collide with retirement timelines, creating pressure if terms run near or beyond age caps. For many, secured options deliver a safer, more sustainable structure, provided the risks are understood and managed.

Kandoo is a UK-based retail finance broker. We help you compare secured solutions across lenders so you can choose with confidence, backed by clear explanations and straight answers.

Who benefits from this guide

If you are 55 or over, own a home in the UK and want to raise funds without derailing retirement plans, this is for you. Perhaps you are consolidating higher-cost debt, improving energy efficiency at home, helping family with a deposit, or supplementing income while markets recover. You might prefer not to move or to keep monthly payments minimal. You may also be weighing up inheritance goals and the impact on benefits. This guide is written to give you practical clarity before you speak to an adviser, so you can frame the right questions and shortlist suitable products.

Jargon made simple

• Later life lending: Umbrella term for mortgages and secured loans designed for borrowers aged 55+. Includes lifetime mortgages, retirement interest-only and standard mortgages with extended age terms.

• Lifetime mortgage: Equity release loan for 55+ with no mandatory monthly repayments. Interest typically rolls up and is repaid on death or moving into long-term care.

• Drawdown facility: A lifetime mortgage feature letting you release funds in stages to reduce interest roll-up.

• Equity release: Ways to access property wealth without selling. Lifetime mortgages are the most common. Home reversion involves selling a share of your home.

• Retirement interest-only (RIO): Interest-only mortgage with no set term. Capital repaid from sale of the property when you pass away or move into care.

• Standard mortgage past 55: Traditional repayment or interest-only mortgage with later maximum age, subject to affordability in retirement.

• Secured loan or second charge: Additional loan secured against your property, leaving the main mortgage in place.

• Loan-to-value (LTV): The loan as a percentage of your property value. Lower LTV can improve rates and options.

• Early repayment charge (ERC): A fee for repaying or overpaying within a fixed or defined period.

Your secured choices at a glance

1. Lifetime mortgage

   • Access tax-free cash from your home from age 55, with optional ad hoc or fixed monthly interest payments. Interest rolls up if you do not pay. Suits those prioritising cash flow and staying put. Market growth of 11.1% in Q1 2025 underscores demand.

2. Retirement interest-only mortgage (RIO)

   • Pay interest monthly, keep capital until you pass away or move into care. Useful where income comfortably covers interest and you want to limit balance growth. Lending volumes dipped slightly, but demand remains steady.

3. Standard residential mortgage with extended age

   • Increasingly available beyond age 75, sometimes with no maximum age, assessed on pension and investment income. Works for borrowers able to evidence sustainable repayments into retirement.

4. Second charge secured loan

   • Keep your current mortgage rate and take a separate secured loan for additional borrowing. Helpful if you are locked into a low fixed rate or face heavy ERCs on a full remortgage.

5. Home reversion plan

   • Sell a share of your home for cash while living there rent free. No interest, but you give up part of future property growth. Best considered with specialist advice.

Costs, trade-offs and risks compared

Can you qualify

Eligibility is broader than it used to be. Many lenders will consider applications past age 75, and some do not set a hard maximum provided affordability is sound. For repayment-based borrowing, you will be assessed on earned income before retirement and on stable retirement income from pensions, annuities, State Pension, rental property or investments. Credit history, loan-to-value and property type remain pivotal. For lifetime mortgages and home reversion, you typically need to be at least 55, own a qualifying UK property and meet provider criteria on value and construction. RIO products expect evidence that interest payments are comfortably affordable over time. Lenders also consider dependants, existing debts and any anticipated changes such as stopping work or drawing a defined benefit pension. Women over 55 can face unique challenges due to lower independent pension wealth, which may influence affordability. A detailed review with an adviser helps align product choice with your retirement timeline, tax position and estate planning goals.

Step-by-step pathway

1. Define the purpose, amount and timeline for funds.

2. Check income sources now and in retirement.

3. Gather documents and recent mortgage statements.

4. Get an affordability and LTV assessment.

5. Compare suitable products and headline features.

6. Model costs, ERCs and inheritance impact.

7. Complete advice, valuation and application.

8. Review offer, sign, and draw funds responsibly.

The upsides and the trade-offs

Read this before you commit

Start with a clear objective and a time horizon. If bridging a temporary income gap, a facility with flexible overpayments could prevent interest from snowballing. If supporting family, agree boundaries to avoid over-borrowing. Model stress scenarios at higher rates and longer lifespans. Consider the interaction with means-tested benefits and care funding assessments. Check for features like downsizing protection, partial repayment allowances and fixed ERC schedules. Remember unsecured personal loans may look simple but can strain cash flow near retirement and risk carrying beyond age caps. Women, particularly widows, should review pension entitlements and survivor benefits to avoid income shortfalls. Professional, regulated advice is not a luxury in this market - it is a safeguard.

If not that, try this

1. Remortgage your whole balance to release equity if ERCs are low and a single new rate is competitive.

2. Use a flexible lifetime mortgage with voluntary payments to limit roll-up without mandatory commitments.

3. Consider term retirement loans backed by investments if advised and suitable for your risk profile.

4. Downsize to unlock equity with lower running costs if you are open to moving.

5. Blend products, for example a small RIO for cash flow plus savings withdrawals, to reduce overall borrowing.

FAQs

Q: Will a lifetime mortgage affect my benefits? A: Released cash can impact means-tested benefits if it increases your savings. Staged drawdown helps you take only what you need, when you need it.

Q: Can I borrow past age 75? A: Often yes. Many UK lenders consider lending beyond 75, with affordability tested on retirement income and overall stability.

Q: Is equity release safe? A: Reputable plans follow standards like no negative equity guarantees. You must still understand costs, ERCs and inheritance effects before proceeding.

Q: RIO or lifetime mortgage - which is cheaper? A: If you can afford interest payments, RIO can limit balance growth. If you need payment-free flexibility, a lifetime mortgage can be more practical despite roll-up.

Q: Are second charge loans a good idea during a low fixed-rate period? A: They can be, as they avoid disturbing a low main mortgage. Compare total costs versus remortgaging, including fees and ERCs.

Q: How much can I release? A: It depends on property value, age, LTV and product type. Older ages typically allow higher LTV on lifetime mortgages.

What to do now

List your goals, the amount required and how long you need the funds. Pull together income and pension statements, then speak to a qualified adviser to compare lifetime, RIO, second charge and extended-age mortgages. Ask for personalised costed illustrations, including ERCs and inheritance outcomes, before you commit.

Important information

This article provides general information, not personal advice. Secured borrowing places your home at risk if you do not keep up repayments. Product availability and eligibility depend on your circumstances. Always seek regulated advice before making decisions.