Report More Pension Freedoms To Be Set Out By Treasury in House prices and the economy Posted October 16, 2014 Using pension as the repayment vehicle for a mortgage would make a big change to affordability. Lenders would need to let you do interest only and allow pension lump sum and instant withdrawal to be used for final repayment. Lenders still do this. However they do have a tendency to add on 0.5% to the mortgage rate for interest only these days. The lack of availability of Interest only mortgages for older borrowers (50+) is a factor in the low number of property transactions. Very few people borrow on a repayment basis for much less than 25 years as this makes the monthly payments very high. Most end up staying put and just continuing with the mortgage they are already on. It's insane that people with large pension pots are forced into repayments.