Later life mortgage lending increased in the second quarter of 2026, with both the number and value of new loans rising sharply year-on-year, according to the latest data from UK Finance.
A total of 37,300 new loans were advanced to older borrowers during Q2, up 13.4% compared with the same period last year.
The value of lending rose at an even faster rate, increasing 20.5% year-on-year to £6.2bn.
Lifetime mortgage activity was more subdued. There were 5,730 new lifetime mortgages advanced during the quarter, 1.7% fewer than in Q2 2025 but 8% higher than in the first quarter of this year. Lending totalled £490m.
Retirement interest-only (RIO) mortgage volumes also increased, with 323 new loans completed, up 5.9% year-on-year. The value of RIO lending rose 24% to £31m.
Later life borrowing continues to account for a notable share of the wider mortgage market. Residential later life loans represented 7.8% of all residential loans advanced during Q2.
The proportion was considerably higher in the buy-to-let sector, where later life borrowing accounted for 20.6% of all new BTL loans.
David Forsdyke, head of later life lending at Knight Frank Finance, said: “The figures are flattered by the fact that many deals during Q2 2025 were brought forward to beat the April changes to stamp duty, however they signal strong demand given the rise in borrowing costs during the past three years.
“Demand for later life borrowing is being driven by three factors: firstly, the rising cost of living is leaving many retirees short of money each month, where they may previously have had surplus funds. Their property is an obvious place to look to release liquid funds. Secondly, property prices in many parts of the UK, particularly London, are now prohibitively high for first time buyers.
“Parents and grandparents are therefore borrowing against their own homes in order to bring the first purchase within reach for the younger generations. Finally, increasing numbers of homeowners who took mortgage terms extending beyond retirement, sometimes on an interest only basis, are now restructuring their borrowing, hence the quarter-on-quarter increase in retirement interest-only mortgages.”
Rachel Springall, finance commentator at Moneyfactscompare, highlighted the fact that later life lending continues to play an important role for homeowners, as reflected by the volume of new loans which is up 13.4% year-on-year.
She said: “Homeowners may want to release equity as a lump sum payment, but they could instead find a drawdown structure more appropriate for their circumstances. This is why it is so important to get good advice to explore the array of options but also to include family members in the conversation on how outstanding debt reduces the net value of an estate for inheritance tax purposes. Rising interest rates may be making the headlines, but this should not be a reason to halt homeowners from seeking advice.
“Retirement interest-only (RIO) mortgages can be a helpful option for older borrowers, with new loans up 5.9% year-on-year and lending worth £31m, up 24% versus Q2 2025. The growth in RIO lending highlights the importance of having a broad range of options available to older borrowers. The FCA is examining the lifetime and RIO mortgage sector to consider whether change is needed to meet consumers’ changing needs, and with interim findings expected in Q4 2026, it will be interesting to see whether this leads to further innovation and choice for older borrowers.”
