What if you never had to repay your interest-only mortgages?
For many landlords, the inevitability of eventually having to repay mortgages was never regarded as the best outcome, just the default one.
At one point, you probably did have a plan; most likely something along the lines of sell a few properties at retirement, clear some debt, and simplify things over time. That’s perfectly sensible, and for many landlords, that was the intention. However, portfolios evolve, values rise, rents increase, income becomes more important than capital, CGT needs to be considered, and what once looked like a tidy “exit strategy” can start to feel like an unnecessary disruption.
The problem isn’t the mortgages; it’s the timing.
Interest-only borrowing did exactly what it was supposed to do; it helped you build, but now you might be in a different position. What if the mortgage on your own home is coming to the end of the term and most lenders are not interested because you’re getting too old?
You’re faced with a decision that doesn’t quite fit anymore
Do you stick to the original plan and start selling rental properties?
Do you downsize you home?
Or do you step back and ask a more relevant question: Does this debt actually need to be repaid during my lifetime?
For many landlords, that is where the thinking has shifted.
This is where later life lending comes in – NOT Equity Release – that’s different
Lenders like Livemore are approaching this from a completely different angle; no fixed “end point” based on age, and no assumption that capital must be repaid within a set term. Instead, they look at whether your income supports the costs of borrowing, e.g. rental profits from your portfolio and pension income, whether current or projected. If that income comfortably services the debt, the mortgage can continue for the rest of your life, not as a workaround but as the intended structure.
That opens up a very different set of choices
You are no longer locked into selling assets at a time that suits the lender, triggering CGT simply to meet a deadline, downsizing your home or reducing income to reduce debt. Instead, you can choose to keep the portfolio intact and let it do what it already does well, generate income. The loan is then typically repaid from your estate in due course.
This isn’t about avoiding responsibility
The debt still exists, it is still serviced, and it is still ultimately repaid. What changes is when and how that happens. For many landlords, that shift alone is enough to transform the conversation.
Plans change; your financing should too.
What made sense 15 or 20 years ago may not be the best option today, not because the original plan was wrong, because your position is now stronger: more assets + more income = more options. The mistake is assuming you still have to follow a plan that no longer fits.
If this is starting to resonate you are not alone. We are seeing more landlords reach this point, where the portfolio is working, but the lending structure is starting to feel out of sync. The key is to look at your options before you are forced into a decision.
A conversation worth having
If you are weighing this up, it is worth having a proper discussion about what later life lending could look like in your situation.
It may also be worth taking a closer look at how your portfolio is structured as a whole.
These conversations are typically most useful for landlords with established portfolios and relatively modest borrowing who are beginning to reflect on how their assets could work more effectively in the years ahead.
Enquire about a free initial discussion with a Property118 consultant
|
★★★★★
|
Help other landlords find Property118If you have found Property118 useful, a short Trustpilot review would make a meaningful difference. It helps other landlords decide whether our research is worth following. |
Comments
Have Your Say
Every day, landlords who want to influence policy and share real-world experience add their voice here. Your perspective helps keep the debate balanced.
Not a member yet? Join In Seconds
Login with
Previous Article
Government publishes Renters’ Rights Act information sheet with £7,000 fine warningNext Article
20) Am I missing a trick?
Member Since September 2022 - Comments: 26
2:29 AM, 21st March 2026, About 3 weeks ago
I’m pretty sure my buy to let mortgage doesn’t have an end date, unlike my residential, both are interest only
Member Since June 2013 - Comments: 381 - Articles: 61
10:51 AM, 21st March 2026, About 3 weeks ago
Reply to the comment left by Colette McDermott at 21/03/2026 – 02:29
Hi Colette
It would be rare to find a mortgage (a contract of a loan between lender and borrower) without an expiry date.
It’s not impossible, but I would check your mortgage Offer documents for confirmation.
The last thing you would want is for the lender to write to you demanding full repayment, and you weren’t expecting it.
Certainly, in the BTL world. we provide our Clients with access to mortgages that have no upper age limit, but even they are subject to contract end dates. For example, I have recently arranged 40 year BTL mortgage terms for husband and wife landlords who are both 80 years old. That takes them to 120 years old (note, many lenders cap maximum age at expiry at about 80, 85’ish), but they have the peace of mind of a 40 year contract.
Member Since September 2022 - Comments: 26
11:47 AM, 21st March 2026, About 3 weeks ago
Reply to the comment left by Howard Reuben – mortgage and insurance broker at 21/03/2026 – 10:51
Ooh, yes, I agree, I’m checking with them. I remember a while back looking and not seeing an end date, so assumed it simply continued. I’ve asked them direct…thanks
Member Since January 2011 - Comments: 12193 - Articles: 1395
11:47 AM, 21st March 2026, About 3 weeks ago
Reply to the comment left by Howard Reuben – mortgage and insurance broker at 21/03/2026 – 10:51
We are currently working with a group of lenders with a view to building the UK’s first Later Life RIO (Retirement Interest Only) BTL product.
Member Since June 2013 - Comments: 381 - Articles: 61
10:44 AM, 22nd March 2026, About 3 weeks ago
Reply to the comment left by Mark Alexander – Founder of Property118 at 21/03/2026 – 11:47
Hi Mark
Canada Life used to offer a very similar product.
It was called the Over 55 Buy-to-Let Voluntary Select Option “Our flexible later life buy-to-let mortgage”
Their product info states “Make the most of your retirement by unlocking tax-free cash from your buy-to-let property portfolio. Available to landlords aged over 55, our Buy-to-Let Voluntary Select Option gives you the flexibility to make repayments when it suits you.”
The product expired on death.
Canada Life stopped providing this BTL equity release product many years ago, I think at about the time of the credit crunch.
I was at a mortgage industry event a couple of weeks ago, and asked a few lenders for exactly this type of mortgage. A lot of my BTL clients were already in their 40’s and 50’s when I started advising them 30 years ago.
A new ‘later life BTL’ mortgage product is definitely being asked for at the mo.
Good luck in your possible launch.
Member Since January 2011 - Comments: 12193 - Articles: 1395
11:35 AM, 22nd March 2026, About 3 weeks ago
Reply to the comment left by Howard Reuben – mortgage and insurance broker at 22/03/2026 – 10:44
Thanks Howard. I think the Canada Life product was based on Equity Release though, i.e. interest rolling up. I wasn’t aware it ever had an interest only option.
Another interesting product that’s not been around for some time, but which I would like to see return, is the BTL Capital Appreciation Mortgage. You organised several of those for me with Castle Trust many years ago. Essentially, they acted like a Venture Capital sleeping Partner in my business, sharing only the upside growth in property value as an alternative to charging interest. It was a godsend when I needed to settle my divorce with my ex-wife but retain my cashflow. Thankfully, that was a very long time ago, so those arrangements have all long-since been redeemed.
Member Since August 2013 - Comments: 107 - Articles: 1
1:57 PM, 22nd March 2026, About 3 weeks ago
Reply to the comment left by Mark Alexander – Founder of Property118 at 21/03/2026 – 11:47
Mark, your article describes us exactly – we have two houses that were on interest-only tracker mortgages for 20 years, ending this summer and that we are looking to re-mortgage past the projected end of our lives so that we can benefit from the income and our children can benefit from any capital growth without being hit by CGT in the meantime. Will the Later Life RIO (Retirement Interest Only) BTL product be some form of tracker?
Member Since January 2011 - Comments: 12193 - Articles: 1395
2:24 PM, 22nd March 2026, About 3 weeks ago
Reply to the comment left by Steve Hards at 22/03/2026 – 13:57
We haven’t got into that level of detail yet Steve, but I’d like to think both tracker and fixed rates will be available.
Member Since June 2013 - Comments: 381 - Articles: 61
11:20 AM, 23rd March 2026, About 2 weeks ago
Reply to the comment left by Mark Alexander – Founder of Property118 at 22/03/2026 – 11:35
Hi Mark, yes, you are absolutely right, it was a BTL ‘equity release’ mortgage product, but it also had the added advantage for the borrower to treat it like an open ended interest only mortgage where “Buy-to-Let Voluntary Select Option gives you the flexibility to make repayments when it suits you” meaning that the repayments would include capital and interest payments, instead of the standard ‘no payments at all required’ basis that the usual equity release mortgages offer. That option helped to reduce the rolled up balance accumulation.
Either way …. that deal is no longer available now anyway 🙂
If a new IO ‘no payment’ product was available, that would support so many people.
In the meantime, right now there are a lot of lenders and products that offer BTL interest only (with the usual monthly IO payments being made) with no upper age limits, no portfolio limits, and some great deals available.
Member Since January 2011 - Comments: 12193 - Articles: 1395
11:22 AM, 23rd March 2026, About 2 weeks ago
Reply to the comment left by Howard Reuben – mortgage and insurance broker at 23/03/2026 – 11:20
It would be very helpful if you could summarise a few examples.