Vernon Building Society sees surge in Retirement Interest-Only Mortgages
23 June 2025
Vernon Building Society has seen a 158% increase in its retirement interest-only (RIO) mortgages from Jan to May 2025 compared to the same period last year. As the trend continues for retirees to access the wealth tied up in their property to fund their lifestyle in retirement or help children onto the housing ladder, RIO mortgages are growing in popularity as people consider more flexible and potentially lower costs alternatives to equity release.
The Vernon’s range of RIO mortgages are available to borrowers over the age of 55 across England and Wales who either want to purchase a home or release cash from the equity in their home. Borrowers will pay interest on the mortgage until it’s repaid, typically by using the proceeds of the property’s sale when they move into long-term care or pass away.
RIO mortgages offer a flexible option for retired borrowers who don’t want to be limited by a set loan term but want a regular monthly payment that can be taken from a pension or other income. Unlike an equity release lifetime mortgage, borrowers are not locked into a lifetime fixed rate, making it less costly to repay the loan early if their circumstances change.
The Vernon’s RIO mortgages start at £25k and go up to £750k, which is substantially higher than many competitor RIO mortgage products.
Brendan Crowshaw, Head of Mortgage and Savings Distribution at Vernon Building Society says:
“We’ve seen a jump in popularity for our RIO mortgage range as more people in retirement are looking to borrow against the value of their home whilst making monthly interest payments. RIO mortgages are becoming increasingly popular as people live longer and face rising living costs. For many, they provide the stability needed to budget with confidence - while also offering greater certainty of leaving an inheritance.
“The Vernon accepts applications from customers who have a lasting power of attorney in place. Additionally, we support those with complex incomes, so in the case of RIO, we look at different pension types and drawdown periods, and other income, which aligns with Vernon’s ethos of offering flexible and inclusive lending.”
Vernon Building Society’s RIO mortgage range has no maximum term and a maximum LTV of 50%. It offers a 5 year fixed at 5.29% and a 3 year fixed at 5.45% both with no arrangement fee. It also has a 5 year 2.51% discount at 5.34% with a £499 arrangement fee.
