If you’re a more mature homeowner, the journey to owning your home outright may not have always been straightforward. Decades of changing mortgage products, economic conditions and shifting lending regulations have left some borrowers in a difficult position now, as they approach retirement.

In the past, advice standards were very different. Interest-only mortgages, endowment-linked loans, and other complex products were often sold without clear explanations of the long-term risks. For some, this has resulted in a looming repayment deadline without the funds set aside to clear the balance.

Today’s mortgage market offers more safeguards, but the legacy of those historic decisions is still being felt. This is why the right advice is critical, particularly for older borrowers who may need tailored solutions to navigate their current circumstances.

The Legacy of Interest-Only Mortgages

In the 1980s and 1990s, interest-only mortgages were marketed as a flexible and affordable way to buy a home. Borrowers paid only the interest each month, with the expectation that an investment plan (often an endowment policy) would grow enough to repay the capital at the end of the term.

Unfortunately, many of these investment vehicles underperformed, leaving homeowners facing a shortfall. Without the capital to repay the mortgage, some have been forced to sell their homes or extend their working lives far beyond their planned retirement.

Helen Ferneyhough, Mortgage and Protection Adviser at HFA Mortgage & Protection, explains:

“We still meet clients who are paying for decisions made 20 or 30 years ago. The rules were different back then and advice wasn’t always as robust as it is today. Our job is to help them find a safe, affordable way forward that protects both their home and their financial wellbeing.”

Changing Lender Criteria

Another challenge for older borrowers is the stricter affordability and age criteria introduced in recent years. Even if someone has managed their mortgage well for decades, they may now face barriers to refinancing, especially if they are approaching retirement age or already retired.

However, the rise of specialist lending, retirement interest-only (RIO) mortgages and later-life products means there are now more solutions than ever – provided borrowers receive advice from a broker who understands this market.

Case Study: Helping a Family Keep Their Home

In 2024, HFA Mortgage & Protection was approached by Alan and Margaret, a couple in their late 60s living in Wigan. They had taken out an interest-only mortgage in the early 2000s, expecting an investment plan to repay the capital. Unfortunately, the investment had underperformed, leaving them with a £90,000 balance and just two years left on their term.

Their lender advised them to sell their home to clear the debt. Understandably, they were distraught as they had lived in the house for over 30 years and wanted to stay close to their children and grandchildren.

HFA reviewed their situation in detail. While their income in retirement was modest, it was stable and they had significant equity in the property. After exploring options, HFA recommended a Retirement Interest-Only (RIO) mortgage from a specialist lender. This allowed them to pay only the interest each month, with the capital repaid when the property is eventually sold.

The result? Alan and Margaret stayed in their home, reduced their monthly outgoings and avoided the emotional and financial upheaval of an unwanted sale.

Margaret says:

“We thought we were out of options. Helen explained everything so clearly and found us a solution we didn’t even know existed. We can finally enjoy our retirement without that constant worry.”

Why Expert Advice Matters Now More Than Ever

Older borrowers face unique challenges:

  • Fixed retirement incomes mean affordability must be carefully assessed.
  • Past products may not meet current lending rules.
  • Inheritance planning can affect the choice of mortgage product.
  • Equity release vs. RIO mortgages require detailed comparison to avoid costly mistakes.

Helen emphasises:

“The right advice isn’t just about getting a deal approved, it’s about ensuring the product suits your lifestyle, income, and long-term plans. For older borrowers, that can mean the difference between staying in their home or having to make drastic changes.”

Looking Ahead

The mortgage market has evolved dramatically in recent years, with more flexible products and better consumer protections. However, for those dealing with the consequences of historic mortgage decisions, personalised advice remains the key to finding stability.

If you’re an older borrower approaching the end of your mortgage term or worried about how you’ll manage repayments in retirement, speaking to an adviser early can open up solutions you may not realise exist.

Speak to a friendly advisor today at HFA Mortgage & Protection – https://HFAssociates.uk

Disclaimer:

There may be a fee for mortgage advice. The precise amount of the fee will depend upon your circumstances but will range from £195 to £1500.

Your home may be repossessed if you do not keep up repayments on your mortgage.