Between 2000 and 2008, interest-only residential mortgages were incredibly common. Lenders handed them out with vague repayment plans — an endowment that might pay out, ISAs that might grow, or simply the hope that the property would appreciate enough. Many of those mortgages are now reaching the end of their 25 to 30 year terms, and borrowers are facing a demand to repay the full capital balance. If your lender is writing to you about a maturing interest-only mortgage, here is what you need to know.\n\nThe Scale of the Problem — The FCA estimates that over one million interest-only residential mortgages will mature by 2028, with a total outstanding balance exceeding 100 billion pounds. Many borrowers have partial or no repayment strategy. The average shortfall is estimated at 71,000, but many owe 100,000 to 200,000 or more. This is not a niche issue — it is one of the biggest financial challenges facing UK homeowners.\n\nOption 1: Repay from Savings or Investments — The simplest option if you have the funds. Some borrowers saved diligently in ISAs, pensions, or other investments. If your endowment or ISA pot covers the balance, great. If it covers part of it, you may need to combine this with another option for the shortfall.\n\nOption 2: Switch to Repayment with Your Current Lender — Your lender may allow you to switch to a capital-and-interest repayment mortgage, extending the term if necessary. On a 100,000 balance at 5% over 15 years, the monthly payment would be approximately 790. Over 20 years it drops to approximately 660. The challenge is affordability — if you are already 55 or 60, some lenders will not extend the term far enough to make payments manageable.\n\nOption 3: Remortgage with a New Lender — A whole-of-market broker may find a lender willing to offer a repayment mortgage on a longer term. Specialist lenders including Hodge, LiveMore, and several building societies will lend to borrowers in their 60s and 70s with terms extending to age 80 or even 85 in some cases. The term depends on your income, pension, and other circumstances.\n\nOption 4: Retirement Interest-Only (RIO) Mortgage — If you cannot afford capital repayments, a RIO mortgage lets you continue paying interest only with no fixed end date. The capital is repaid when the property is sold after your death or move into care. This is often the most practical solution for borrowers over 55 with limited pension income. Monthly payments are similar to what you have been paying all along. RIO lenders include Nationwide, Hodge, Marsden Building Society, and several others.\n\nOption 5: Equity Release (Lifetime Mortgage) — If you cannot afford any monthly payments at all, a lifetime mortgage lets you roll up interest with no payments. The loan and accumulated interest are repaid from the property sale. This is the most expensive option long-term because interest compounds, potentially consuming a large portion of your equity. But for some borrowers it is the only viable route. All equity release products must carry a no-negative-equity guarantee — you will never owe more than the property is worth.\n\nOption 6: Downsize — Sell your current property and buy something smaller and cheaper, using the equity to clear the mortgage and any remaining capital becomes your savings or deposit on the new home. If your property is worth 350,000 and you owe 150,000, selling gives you 200,000 (minus costs) to buy outright or with a much smaller mortgage. The emotional difficulty of downsizing should not be underestimated, but financially it is often the cleanest solution.\n\nOption 7: Part-and-Part — Some lenders offer a hybrid approach where part of the mortgage is on repayment and part remains interest-only. This reduces the monthly payment compared to full repayment while still chipping away at the capital over time. It buys you time without the cost of equity release.\n\nWhat Not to Do — Do not ignore letters from your lender. They will not forget. If you do nothing, the lender can and eventually will take possession of your property. Do not take out expensive personal loans or credit cards to make capital repayments — the interest rates are far higher than mortgage rates. Do not panic-sell at a low price. You have time to plan, but only if you act proactively.\n\nThe First Step — Contact your current lender and ask what options they can offer. Then speak to a whole-of-market mortgage broker who specialises in later-life lending. The Money and Pensions Service (MoneyHelper) offers free, impartial guidance. If you are struggling, StepChange and Citizens Advice provide free debt advice. The worst thing you can do is nothing.