Many mature adults are finding themselves in a situation where they are asset rich and cash poor; the wealth they have accumulated over the years may be reflected in the spiralling value of their home, but not necessarily in their monthly income. This can be a frustrating situation for the millions of over 65s that wish to make the most of the opportunities that retirement brings.

One option is to sell and downsize the home, however this can be costly and emotionally very difficult. Mortgages in retirement are therefore becoming more popular. This can be done through a traditional method or through a lifetime mortgage.

Lifetime Mortgages

Lifetime mortgages typically allow the borrower to make no repayments of either interest or capital whilst they are alive – these mortgages are known as interest roll-up. Whilst this avoids the need to budget for monthly payments, debt can quickly grow as unpaid interest is added to the loan. These mortgages normally have a ‘no-negative equity’ guarantee and the borrower cannot be repossessed whilst living in the home. The interest rates and fees can be relatively high in order to pay for these guarantees. The loan amount and the interest that has accrued is paid back when the borrower dies or moves home.

Traditional mortgages

This option could suit a borrower with guaranteed pension income however, due to most mainstream lenders having inflexible upper age limits, it can be difficult to borrow money on a traditional mortgage in retirement. The flexible approach offered by smaller building societies such as the Vernon is most likely to cater for this type of borrower. As well as capital and interest repayment loans, it is possible to get a mortgage where only the interest is repaid each month with the capital being repaid from the sale of the property on death or downsizing. As with all traditional mortgages the home can be repossessed if payments are not kept up.

For more information about borrowing in retirement, visit

Click here to learn more about our interest only retirement mortgages. Alternatively call 0161 429 6262 or visit one of our six local branches for a friendly chat.

Head office:

Vernon Building Society
19 St Petersgate

Tel: 0161 429 6262
Fax: 0161 477 3303

Telephone calls are recorded and may be monitored for regulatory and training purposes to help maintain service quality.

*The 'AER' stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.


Vernon Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority (registration number 195475).  You can check this on the Financial Services Register. We are also a participant of the Financial Services Compensation Scheme (FSCS). Details of the scheme can be obtained from

Telephone calls are recorded and may be monitored for regulatory and training purposes to help maintain service quality.

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