Lending to borrowers aged over 55 rose sharply at the end of 2025, with mainstream mortgage products taking a greater share of later life finance activity.
New data from UK Finance shows there were 41,100 new loans advanced to older borrowers in the fourth quarter of 2025, an increase of 15.1% compared with the same period a year earlier. The value of this lending reached £6.8bn, up 20.5% year on year.
By contrast, the lifetime mortgage market remained broadly static. There were 5,700 new lifetime mortgages advanced in the quarter, unchanged on the same quarter in 2024 and down 5.6% compared with Q3. The value of this lending totalled £510mn.
Retirement interest-only volumes continued to grow from a low base. There were 388 retirement interest-only mortgages advanced in Q4, up 13.1% year on year. The value of this lending was £36mn, 2.9% higher than in the same quarter a year previously.
Residential later life loans accounted for 8.02% of all residential loans in Q4. In the buy-to-let sector, later life borrowing represented 21.4% of all buy-to-let loans, underlining the continued role of older landlords within the market.
SHIFTING PATTERNS IN RETIREMENT FUNDING
David Forsdyke, partner and head of later life finance at Knight Frank Finance, said the rise in lending reflected longer term demographic and structural changes rather than a short-term spike in activity.
He said: “The 15% rise in lending to older homeowners reflects a structural shift in how later life is funded.
“Many people are asset rich but cash poor after decades of house price growth, yet pension provision and savings have not kept pace.
“Buyers are also purchasing their first homes later and taking longer mortgage terms, which means borrowing now routinely extends into retirement.
“At the same time, equity release lifetime mortgage lending has remained flat year-on-year. That tells us the later life lending market is broadening beyond traditional equity release and becoming a more mainstream form of borrowing.
Older homeowners are increasingly using standard mortgages, retirement interest-only products and other structured solutions as part of financial planning, rather than turning to equity release.
“Longer life expectancy means retirement resources must last longer, while many people prefer to remain in their homes rather than downsize. We are also seeing more clients access property wealth to support children and grandchildren, or to plan proactively around inheritance tax.
“Borrowing in later life is becoming normalised, and we expect that trend to continue as attitudes continue to evolve.”
The figures suggest that, while lifetime mortgage volumes have plateaued, advisers and lenders are increasingly deploying a broader suite of products to meet later life borrowing needs.
The growth in mainstream and retirement interest-only lending indicates that older borrowers are more frequently being assessed under standard affordability frameworks, rather than relying solely on equity release.
For intermediaries, the data reinforces the need to understand the full spectrum of later life options, particularly as a growing proportion of residential and buy-to-let activity now involves borrowers aged over 55.
With later life residential lending accounting for just over 8% of all residential loans and more than a fifth of buy-to-let volumes, the sector is becoming an established part of core mortgage business rather than a niche specialism.
