Retirement should be a time of freedom, not financial stress. But for a growing number of people in the UK, retirement still includes monthly mortgage payments. Whether you’re already retired or planning ahead, here’s what you need to know about retiring with a mortgage and what options are available to make it manageable.
More people are retiring with a mortgage
Historically, most UK homeowners aimed to pay off their mortgage before retirement. But in 2025, this is no longer a given. Longer mortgage terms, remortgaging in later life, and the rising cost of housing mean that thousands of people are still making repayments after 65.
According to the Financial Conduct Authority, over 1.5 million homeowners will still have a mortgage beyond retirement age. It’s no longer unusual, but it does require a plan.
Will lenders let you keep a mortgage after you retire?
Yes, many lenders allow you to keep or even take out a mortgage past retirement, but they will assess your income differently. Instead of looking at salary, they will look at:
- Your pension income (state, workplace, private)
- Any other reliable income (rentals, annuities, part-time work)
- Your age and life expectancy (to judge the loan term)
Some lenders now offer mortgages up to age 85 or even 95, especially if you can show a strong retirement income plan.
Can you remortgage in retirement?
Yes – and in fact, many retirees do just that to get a better rate or switch to a more manageable term. If your current mortgage deal is expiring or you’re on a variable rate, it’s smart to review your options.
However, be aware:
- You may be offered a shorter term, which can mean higher monthly payments
- Some lenders apply stricter affordability checks to retirees
- You might need a financial adviser if your income mix is complex
For more advice, read How to Maximize Your Retirement Income
Is equity release a better option?
For some retirees, especially those with little income but a lot of property wealth, equity release (such as a lifetime mortgage) can be a way to:
- Clear an existing mortgage
- Access tax-free cash from your home
- Stay in your property without monthly repayments
But equity release isn’t for everyone. It reduces your estate’s value, can affect your entitlement to means-tested benefits, and interest rolls up over time. For more, read Is Downsizing Your Home a Good Idea for Retirement?
Should you use your pension to clear your mortgage?
Some people use a tax-free lump sum from their pension to pay off the remaining balance of their mortgage. This can reduce monthly outgoings and give you peace of mind.
But think carefully:
- You’ll lose the growth potential of those funds
- You may reduce your long-term income
- It may not be worth it if your mortgage rate is low
We explain more in What to Do with Your Pension Pot When You Retire
Practical steps to take if you still have a mortgage
If you’re approaching retirement and still have a mortgage, here are some smart moves:
- Speak to your lender – check if your current terms still work for you.
- Create a realistic retirement budget including your mortgage payments.
- Get professional advice – from a mortgage broker or retirement adviser.
- Check if overpaying is possible – it might save interest long-term.
- Explore alternatives – like downsizing or equity release.
Final thoughts
Retiring with a mortgage is no longer unusual, but it does require a thoughtful plan. By reviewing your income, exploring your options, and seeking the right advice, you can maintain financial stability while enjoying your retirement.
Everyone’s situation is different. What matters is that your mortgage doesn’t hold you back from living the life you want after work.
