Retirement mortgages for people aged 55 and over

If you’re a homeowner, you’ve probably seen the value of your property rise over the years. But how can you benefit from the money that’s tied up in your home, if you don’t want to sell up and move?

A Retirement Interest Only Mortgage (RIO Mortgage) from the Scottish could be the answer. It lets you unlock some of the cash from your property, to use however you wish.

5 great reasons to choose a Retirement Interest Only Mortgage from Scottish Building Society

A great way to release money from the value of your home
A cash lump sum to help you make the most of your retirement
You pay the monthly interest charges, so the outstanding balance does not increase
An alternative to traditional equity release schemes
In-branch mortgage specialists to guide you

Key features of a RIO Mortgage:

The minimum loan size is £30,000 and the maximum is £300,000
We will lend up to a maximum of 50% of the property valuation or purchase price (whichever is lower)
All parties to the mortgage must be aged 55 or over
No maximum age

Suitable for:

Homeowners aged 55 or over, looking to release some equity from their property.


Retirement Interest Only Mortgages are available for owner occupied residential properties. All mortgages are subject to a suitable property valuation.

Maximum Loan:

We will lend up to a maximum of 50% of the property valuation or purchase price (whichever is lower).
The minimum loan size is £30,000 and the maximum is £300,000.


The minimum age at time of application is 55. For joint applications, both applicants must be aged at least 55. There is no maximum age.

How much can I borrow?

All applications are treated on an individual basis and based on affordability. The maximum we can lend you is generally determined by your income, which can include your pension.
Any existing financial commitments will also be taken into consideration when affordability is calculated.
Please note in joint applications the last survivor needs to be able to demonstrate serviceability.
If the property is in joint occupancy we will not lend in a sole name. Both occupiers should be party to the mortgage and fit the age and income requirements.

Interest Rate Options:

Please see our interest rate information pages for full details.

Remortgage Incentives:

Valuation Costs: A valuation of your property will be required as part of the mortgage application. The cost of this will be paid by the Society. 

Contribution to Legal fees: If you are remortgaging to Scottish Building Society's Retirement Interest-only Mortgage your solicitors will also act for the Society. The Society will contribute £250 towards the cost of this.


Our Retirement Interest-Only mortgage is set up on an Interest Only basis with no repayment vehicle being required. The mortgage is normally not repayable until you (or the last survivor if it is a joint application) have died, moved into long term care or moved home.

Each month you are required to make a payment to cover the monthly interest on the mortgage. By doing this the capital balance of the mortgage will never increase.


A first charge will be taken over the property being purchased or remortgaged as security for the mortgage lending.

Flexible Features:

You may make overpayments on your mortgage to reduce the capital. If this is during the initial period where Early Repayment Charges apply you may repay up to 10% of the capital balance of the mortgage each year without penalty.

Once any period where Early Repayment Charges are applicable has elapsed you may make capital reductions without limit or penalty to reduce the balance of the loan.


Buildings Insurance must be arranged prior to funds being released.




*Please note, we only lend on properties in Scotland*




How much can I borrow?

The maximum mortgage amount is generally determined by your income(s), which can include pension income, as well as the value of your property. We will lend up to 50% of the value, as assessed by an independent valuer.

We consider each applicant individually. We will carry out an assessment of your net income and outgoings to make sure that the mortgage is affordable now and in the future, whether you are working or retired.

If we are unable to offer you a Retirement Interest-Only Mortgage, we can refer you to a third party who may be able to help. Please ask for further details.

How long does it take to arrange a Retirement Interest-Only Mortgage?

It usually takes about eight weeks for you to get your money, once we’ve received your application. If the mortgage is to provide you with a cash sum, this will be paid to you via your legal adviser.

How will my mortgage be repaid?

Every month you pay interest on the mortgage from your income, which could include pension income. The capital is only repaid when you die or move into care, from the sale of the property.

How can I pay my mortgage?

The easiest and most convenient way to pay is by banker’s direct debit each month. The form for this is included with your mortgage application. We will make the necessary arrangements to collect the required payment from your bank account each month, and you need take no further action. You can also make payments by standing order or regular transfers from a savings account.

What if I want to move home later on?

If you move home and want to transfer this mortgage to a new property, you can do so if the application satisfies the normal lending criteria of Scottish Building Society. If the new property is of a lower value, you may be required to repay part of the amount outstanding on the mortgage.

What if my circumstances change?

If you want someone else to move into your  home with you, for example a member of your family, you must obtain the permission of Scottish Building Society before they move in. Similarly, if you wish to change the ownership of your home from single to joint (for example, if you were to marry), the mortgage may become repayable. Scottish Building Society will assess each change of ownership individually.

Can I make overpayments?

Yes, you can make overpayments on your mortgage to reduce the capital. If this is during the initial period where early repayment charges apply. See below or follow this link for more details on early repayment charges). You can repay up to 10% of the capital balance of the mortgage in any 12-month rolling period without penalty.

What happens if I decide I don’t want the mortgage any more?

If for any reason you no longer want the Retirement Interest-Only Mortgage, you can repay the amount you owe to the Society at any time. There may be a charge for early repayment (see below). You should let us know if you intend to move, or have moved, into long-term care. It is your estate executor’s responsibility to inform us of your death.

What are the early repayment charges?

If you make overpayments of 10% or more of the loan amount in any 12 month rolling period during the initial period, and depending on which mortgage you have, the charges apply as follows:

  • For our 3-year mortgage, you will need to pay a charge equivalent to 3% of the total loan amount.
  • For our 5-year mortgage, the early repayment charge will be:
    • 5% of the total loan in the 1st year
    • 4% of the total loan in the 2nd year
    • 3% of the total loan in years 3, 4 & 5

If you repay the loan in full during the initial period of the mortgage, the early repayment charge is equivalent to 3% of the loan amount.

After the initial period, the Society will not make an early repayment charge if you choose to repay the mortgage. However, there will be certain redemption fees that will need to be paid (see our Details of Charges leaflet for more information).

What if I want to borrow more money in the future?

The Society may be willing to lend you more in the future, if your income and/or the value of your home goes up significantly.

Could my tax position or entitlement to benefits be affected?

A cash lump sum could affect your tax liabilities. It may help to get more information or advice on tax issues before taking out a retirement interest-only mortgage. The law relating to taxation could change in the future. You could contact HM Revenue & Customs to check how your tax position may be affected.

A cash lump sum could also affect your entitlement to welfare benefits (such as pension credit and housing benefit) depending on your financial circumstances. You should contact the Department for Work & Pensions or the Citizens Advice Bureau if you need to talk through any welfare benefits issues in more detail.

Do I need to insure my home?

You must arrange Buildings Insurance for your property before funds can be released.

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