Insights Hub
Types of Later Life Lending
The later life lending market has evolved far beyond its original roots, offering advisers more tools than ever to meet a wide range of client goals. While Lifetime Mortgages and Home Reversion Plans have been the cornerstone products for many years, the introduction of Retirement Interest-Only Mortgages (RIOs) and Retirement/Term Interest-Only Mortgages (TIOs) has expanded the market with new, flexible options that bridge the gap between traditional mortgages and equity release.
Here’s an overview:
LTM
Lifetime Mortgages
The most common form of equity release, allowing clients to borrow against the value of their home while retaining ownership. Interest can be paid monthly, partially, or rolled up, with repayment usually triggered on death or moving into long-term care. Flexible features such as drawdown, voluntary repayments, and inheritance protection can be tailored to the client’s needs.
HRP
Home Reversion Plans
Less common, but still valuable in certain scenarios. Clients sell a proportion (or all) of their home to a provider in exchange for a lump sum or regular income, while retaining the right to live there rent-free for life. The percentage sold is fixed, so clients benefit from any future growth in the retained share.
RIO
Retirement Interest-Only Mortgages
A more recent innovation in later life lending. These products allow clients to pay interest monthly for life, with no fixed repayment date. The capital is repaid when the borrower passes away or enters long-term care. They can be suitable for clients who want to maintain their estate value or keep monthly payments predictable.
TIO
Retirement Mortgages & Term Interest-Only Mortgages
Standard mortgage products designed to run well beyond traditional retirement age, often with repayment, interest-only, or part-and-part options. They can be a stepping stone for clients not yet ready for equity release or who meet affordability requirements for longer-term borrowing.
Later Life Lending Product Comparison
This table compares the four main later life lending solutions described above. It highlights their key features, differences, and potential client uses, helping advisers quickly identify the most suitable product for each scenario.
At TERN, we give you access to all four later life lending solutions - not just one or two. This whole-of-market position means you can always put the client’s needs first, whether they want maximum flexibility, the lowest cost, or the greatest possible release of capital. By combining these options with our tools, training, and compliance framework, you’re positioned to offer truly comprehensive later life advice.
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