An interest-only lifetime mortgage lets you pay interest monthly so the debt grows more slowly or not at all. How payments work and what stopping does.

In short, an interest only lifetime mortgage is a lifetime mortgage on which you choose to pay interest as you go, instead of letting it roll up. Whether it suits you depends on your income, your home and your plans. If you would like these points checked against your own finances by a qualified equity release adviser, the form on this page sends what you enter to a single FCA-authorised adviser firm; it costs nothing and commits you to nothing.

Two professional steps are part of taking one out. The Equity Release Council, the industry trade body, says it is important "to get qualified advice", meaning a qualified equity release adviser, and its standards require every equity release customer to have independent legal advice from a solicitor. The legal-advice requirement is a standard its members follow, not a law binding every firm. The wider picture is in our guide to equity release in the UK.

What an interest-only lifetime mortgage is

Lenders give it their own names: Legal & General calls its version an "Optional Payment Lifetime Mortgage" and Pure Retirement an "interest serviced lifetime mortgage". Underneath is a standard lifetime mortgage with a choice added. A lifetime mortgage needs no monthly repayments, but, as the Equity Release Council puts it, with some plans you can opt to make monthly repayments rather than roll the interest up.

Not every lifetime mortgage offers this, so check the plan's terms. The loan is still secured on your home, you still own it, and the Council says it is repaid from your estate when you die or move into long-term care. What changes is whether the interest is paid as it falls due or added to the loan, where it is itself charged interest; how equity release interest works explains the compounding. FCA Handbook rule MCOB 3A.2.6R says a communication must describe a lifetime mortgage as a "lifetime mortgage" and not use any other expression for it, so "interest-only" is a description of how you choose to repay, not a product name.

How the monthly payments work

Because the payments are optional, the detail sits in each lender's own terms, and the two lenders' documents quoted here differ.

  • Legal & General says: "You can pay some or all of the monthly interest to reduce the overall cost of the loan, and you can stop making payments at any time." It adds that any unpaid interest is added to what you owe.
  • Pure Retirement's customer guide for its Heritage range, dated July 2024 and still listed on its interest-servicing page on 18 October 2026, says an interest serviced lifetime mortgage "offers an interest rate discount if you choose to make monthly payments". The discount applies "if you make monthly payments of at least 25% of the monthly interest", and once the plan is set up "the amount of your monthly payment cannot be changed", though "you can choose to stop making the monthly payments at any time." Its Emerald range has a separate guide of its own.

The plan's key facts illustration is where your own figures appear: MoneyHelper, the government-backed guidance service, says it shows the regular payments and what they would be if interest rates rose, and that it can be used to compare other providers' schemes. Rates and monthly amounts vary by plan and date; our guide to equity release rates explains why and where the figure for your plan is set out, and how to get an equity release quote covers what you need to provide.

What happens if you stop paying the interest

This is the question to ask any lender before choosing, because the answer is not the same everywhere. From the two lenders' documents:

  • Legal & General: "However, once you stop, you won’t be able to start them again." Unpaid interest is added to the amount you owe. Depending on when the plan was taken out, a reduced rate may apply while you pay, and "After 15 years the reduced rate will apply for the rest of the lifetime mortgage, even if you stop making monthly interest payments."
  • Pure Retirement (Heritage guide): payments can be stopped at any time, but "once you have missed more than three payments in any 12-month period from your completion date they cannot be restarted. The interest rate will also increase as the discount will no longer apply for the rest of the mortgage term, and any unpaid monthly interest will be added to the loan each month and rolled up." It allows "up to three monthly payment holidays in every 12-month period from your completion date."

With both lenders, stopping means unpaid interest is added to the loan, so the plan moves towards a roll-up loan. Other lenders set their own terms, so check the key facts illustration for the plan you are offered. Legal & General states the consequence plainly: "if you don’t pay some or all of the monthly interest, the amount you owe will increase quickly over time." Pure Retirement says it will not assess whether you can afford the payments "as they can be stopped at any time", and that your adviser will assess affordability.

Because the rules on stopping, restarting and missed payments differ by lender, by product range and by when the plan began, they are worth checking against your own situation before you commit, including what would happen if your income fell. A qualified equity release adviser can take you through the terms of a plan line by line; sending the form on this page is one route to an introduction.

What it costs, and what does not change

Paying interest slows the debt; it does not remove the other costs of a lifetime mortgage. Legal & General's plan page lists them: "A lifetime mortgage will reduce any inheritance you wish to leave", repaying in full may bring "an Early Repayment Charge which could be substantial", and that taking out a lifetime mortgage may affect your entitlement to means-tested benefits or pension credit. MoneyHelper adds that Local Authority grants and Council Tax reductions can be affected too. Repaying equity release early explains how repayment works.

Your estate is also smaller: whoever inherits the home receives only what is left once the loan is repaid. Paying interest reduces how fast the balance grows, which is a different thing from reducing the loan itself. How equity release affects inheritance and equity release and benefits go further.

The Equity Release Council's product standards apply to its members' products rather than as law. They include a rate fixed, or capped if variable, for the life of the loan; a right to live in the property for the rest of your life, or until you need permanent care, provided it is still your main home and you keep to the plan; and a no-negative-equity guarantee, which stops the debt passing the home's value after reasonable sale costs where the sale gets the best price reasonably obtainable and the borrower has stuck to the loan conditions. The Equity Release Council's standards lists every condition, and each plan's terms say how they apply.

How it differs from a retirement interest-only mortgage

The two are easily confused. MoneyHelper describes a retirement interest-only mortgage as one where you make a payment each month to cover the loan interest, and where the amount you borrow is usually only repaid when you sell your home, move into long-term care or die. The difference this page is concerned with is that payments are required, whereas on an interest-only lifetime mortgage they are optional; retirement interest-only mortgage or equity release compares the two.

If you already have an interest-only mortgage that is coming to an end, equity release with an existing mortgage explains how it is handled.

Scotland. This page covers the UK generally. For a home in Scotland the lender's security is a standard security, not a mortgage charge: the 1970 Conveyancing and Feudal Reform (Scotland) Act, in section 9, says a security for a debt over land can only be created if it is "embodied in a standard security."

Questions people ask about interest-only lifetime mortgages

Can I pay the interest on a lifetime mortgage each month so it does not roll up?

Only on plans that offer it; not every lifetime mortgage does. If you pay only part of the interest, the unpaid part is added to the loan, as Legal & General describes, and Pure Retirement's Heritage guide gives its discount only on payments of at least 25% of the monthly interest.

Which providers offer interest-only lifetime mortgages, and at what rates?

Legal & General and Pure Retirement are the two lenders quoted on this page, as examples rather than a ranking; rates vary by plan and date. A qualified equity release adviser can tell you which plans they can offer and at what rate; see how to find and check an adviser.

Is there an interest-only lifetime mortgage calculator?

How much equity release you can get covers what calculators can and cannot tell you. For your own plan, the key facts illustration sets out the regular payments.

Can I pay off a lifetime mortgage early?

Yes, but repaying in full may bring an early repayment charge, as above. The Council's standards also give customers the ability to make some repayments without charges, subject to the lender's criteria. See repaying equity release early.

Whether an interest-paying plan is worth considering turns on your income, your home, your family and your benefits. A qualified equity release adviser can weigh those together in one conversation; to arrange it, the form on this page, short and free, is where to begin.

Sources: Equity Release Council, What is equity release?; Equity Release Council, Professional Standards & Guarantees; MoneyHelper, What is equity release? (archived 19 September 2026); Legal & General, Optional Payment Lifetime Mortgage; Pure Retirement, Customer Guide on Interest Serviced Lifetime Mortgages (Heritage, July 2024); Pure Retirement, Interest servicing; FCA Handbook, MCOB 3A.2; legislation.gov.uk, Conveyancing and Feudal Reform (Scotland) Act 1970, section 9. All accessed 18 October 2026.