The latest UK Finance figures show that the number of new loans advanced to older borrowers stood at 41,100, a rise of 15.1% annually.
The report noted that there were 5,700 new lifetime mortgages advanced in the period, which is in line with the same quarter from last year but down 5.6% on Q3 2025.
The value of lifetime mortgage lending was estimated at around £510m, UK Finance said.
The firm added that retirement interest-only (RIO) lending came to £36m, which is a rise of 2.9% year-on-year.
The number of RIO loans came to 388, which is up 13.1% year-on-year.
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Residential later life loan accounted for around 8.02% of all residential loans, while buy-to-let (BTL) later life loans made up 21.4% of all BTL loans.
Richard Pike, chief sales and marketing officer at Phoebus Software, said: “The rise in later life lending announced by UK Finance reflects the growing importance of this sector within the wider mortgage market. Today’s figures show that later life lending accounted for 8% of all residential mortgage lending in Q4 2025.
“With people living longer and facing more complex financial needs in later life, these products provide a crucial solution for those looking to unlock property wealth. This is no longer a niche area, and the Financial Conduct Authority has set out plans for a focused later life lending market study.
“While some mainstream lenders are starting to offer later life products, the sector’s growth is being led by specialist lenders, and we’re hearing from our account servicing clients that they expect the market to continue to grow in 2026.”
