Equity Release to Pay Off Your Mortgage
Your interest-only mortgage is approaching its term end and the lender wants the capital back.
Important: Equity release is a long-term commitment and will reduce the value of your estate. It may affect entitlement to means-tested benefits. Independent financial and legal advice is required. All plans recommended are from Equity Release Council approved lenders. Your home may be repossessed if you do not maintain required payments on a secured loan.
About Equity Release to Pay Off Your Mortgage
This is one of the most common - and most stressful - situations facing older homeowners. Equity release is one of several solutions, and it's not always the right one. We compare it honestly against RIO remortgage, specialist remortgage, and downsizing before any recommendation.
The options we compare
Equity Release to Clear the Balance
Use a lifetime mortgage to repay your existing interest-only mortgage. The equity release proceeds pay off the outstanding balance. You then have no mortgage and no monthly mortgage payments - the equity release is repaid from the eventual property sale.
Switch to a RIO Mortgage Instead
A Retirement Interest Only mortgage removes the capital repayment deadline entirely - you continue paying interest monthly, and the capital is repaid from the property sale with no fixed deadline. If your income can service monthly interest payments, a RIO often preserves more equity than equity release.
Specialist Remortgage
Specialist lenders including LiveMore Capital and Hodge Bank regularly take on remortgage cases where mainstream lenders will not extend. A new interest-only or capital repayment mortgage from a specialist extends the term without equity release.
Equity Release - Partial Use
If your mortgage is £80,000 on a £350,000 property, equity release can repay the £80,000 and leave the remaining equity release proceeds (if any) for other purposes. You are not required to take the maximum equity release amount.
Downsizing
Selling your current home and buying a smaller, less expensive property outright - or with a smaller mortgage. Downsizing is sometimes the right answer, and we model it honestly alongside the mortgage options before any recommendation.
Combination Approach
Some clients use equity release to clear part of the outstanding mortgage and combine this with a small RIO on the remainder. This reduces the equity release amount (and therefore the interest roll-up) while removing the capital repayment deadline.
How We Help
Urgency assessment
If your mortgage term end is within 12 months, contact us immediately. We prioritise these cases. Equity release and RIO remortgage both complete within 8-12 weeks in most cases.
Option modelling
We model equity release, RIO, specialist remortgage, and downsizing side by side - with monthly costs, total debt, estate impact, and timeline for each.
Lender approach
If equity release: we compare Aviva, Legal & General, Just, Canada Life, and others. If RIO: we approach LiveMore, Hodge, and Legal & General simultaneously.
Race to complete
We complete before your existing lender's deadline. In most cases, this is achievable - but acting early gives the most control over the outcome.
Speak to our later life lending specialists
Call 0204 6211776 · Whole-of-market advice across all later life products
Frequently asked questions
Can I use equity release to repay an interest-only mortgage?
Yes - and 26% of all equity release in 2025 was used for exactly this purpose. The equity release lender pays off the outstanding interest-only mortgage at completion. You are left with a lifetime mortgage (no monthly payments required) instead of the expiring interest-only mortgage with its capital repayment demand.
Is equity release always the best solution for a maturing interest-only mortgage?
No - equity release is appropriate when you cannot afford monthly payments (so RIO is not viable) and you do not want to downsize. If your income can service monthly interest payments, a Retirement Interest Only (RIO) mortgage typically preserves more equity because interest does not roll up. We model both before any recommendation.
My mortgage term ends in 6 months. Is it too late for equity release?
6 months is workable but requires urgent action. Equity release typically completes within 8-12 weeks. Contact us immediately - we will assess the situation and confirm whether the timeline is achievable. In some cases, we can also request a short-term extension from your existing lender to buy additional time.
What if the outstanding mortgage balance is more than what I can release with equity release?
This is a negative equity situation. If the outstanding mortgage exceeds the property value, it must be addressed separately - equity release cannot create value that does not exist. We advise honestly on this situation and explore all available options including discussion with the existing lender.
Can I use equity release to pay off a buy-to-let mortgage?
Equity release is only available on your main residence - not on buy-to-let properties. However, if you have equity in your main residence, you can use equity release to generate funds that are then used for any purpose, including meeting obligations on other properties.