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How to get a mortgage if you’re an older borrower
Compare mortgage deals for older people [1]
Mortgage lenders usually have an upper age limit as part of their eligibility criteria. As the age of first-time buyers and life expectancy increases, providers have had to adjust to accommodate.
Generally, the age limit is how old you’ll be when the mortgage term ends. For instance, you must be below 70 when the mortgage is paid back in full. But some lenders may have an age limit for when you can take out the mortgage, too.
When planning on getting a mortgage later in life, make sure to consider that you are able to repay your mortgage comfortably when retired.
What is considered ‘older’ when borrowing for a mortgage?
Typically, the upper age limit is between 70 and 95.
It will vary from lender to lender, so make sure you speak to your mortgage provider before taking out a loan to make sure you understand every detail. It will also depend on the mortgage term you require.
For instance, your application will be rejected if you’re 50 years old looking for a 25-year mortgage and the lender has an upper age limit of 70.
What is the oldest age you can get a mortgage?
If you’re applying at an older age, you may start to struggle to find a competitive mortgage around the age of 75.
Lenders will consider different factors when evaluating your eligibility, such as if there is a lot of equity in the property, whether you have a life insurance policy in place and if you can comfortably afford the repayments of the mortgage. These factors might result in competitive deals.
Getting approved for a mortgage
As you get older, mortgage lenders will usually perform more checks during your application than they would when you were younger. This could even start in your 40s.
If you’re retired, or nearing retirement, you may be required to save up a larger deposit. Proving your income will be a case of showing evidence of your pension, savings and any investments that you may have, as the lender will want to know that you can afford the repayments comfortably. They will also perform a credit check, so having a good credit score really helps.
It will also depend on the property you’re looking to buy. Lenders may be less likely to accept an application on a property of non-standard construction if you’re retired.
It is always vital to get expert help when considering getting a mortgage. It is important to speak to friends and family when taking out one later in life to evaluate your induvial circumstances and make sure it's the right option for you.
Extending your mortgage term
If you’re thinking about extending your mortgage term to potentially lower your monthly repayments, you may find that your lender is less than keen the older you get, especially if they have a relatively low upper age limit.
It will all depend on your age and how long you want to extend the term by, but there’s no harm in asking.
Can I get a mortgage after I retire?
Yes, it’s possible to get a mortgage after you retire, but you may have limited options and the deals offered tend to be less competitive than they are for younger applicants. This is because you’re seen as more of a risk to the lender.
You may want to speak to a mortgage broker who would be able to find options available to you and help you through the process.
Mortgages for over 50s
As long as your finances are in order and the property you’re looking to buy is sound, getting a mortgage in your 50s shouldn’t be too much trouble.
There are plenty of mortgage providers who are prepared to lend to people in their 50s and you can usually get a 25-year term. You shouldn’t see a difference in the mortgage rates offered to you compared to a younger applicant, although you may be asked about your predicted retirement income.
Mortgages for over 60s
You probably still won’t struggle to find a mortgage but the checks may be more stringent, for instance the lender will want to see that your pension and savings will be able to cover the repayments.
You may also find that you can only get a mortgage term of less than 20 years and the rates start to get less competitive.
Mortgages for over 70s
It’s not impossible to get a mortgage in your 70s, but there won’t be a great deal of choice. The term will get even shorter, usually between five and 15 years, and you can expect high interest rates to offset the risk of lending to an older person.
It may be worth having a look at the alternatives available, as you don’t want to be put under unnecessary financial stress.
What type of mortgages can older borrowers get?
If you’re unable to get a standard mortgage, there are other types available which may be suitable:
Older people’s shared ownership (OPSO)
Available to those aged 55 or over, this scheme enables you to buy a portion of a property (between 25-75%) and pay subsidised rent to the housing association on the rest. 75% is the maximum share of the house you can buy through OPSO, rather than 100% in the standard shared ownership scheme
Lifetime mortgages
This is a type of equity release available to those over 55, where the mortgage is secured against your home. You don’t make any repayments, but interest is still added onto your loan. When you move into care or die, the whole amount, including the interest, will be paid off by selling the house
Retirement interest-only mortgages
Again, this is only available to those aged 55 or over. Your monthly repayments will only cover the interest and the loan is usually repaid in full when you move into care or die. As you don’t pay off the capital, it’s unlikely that you’ll be able to borrow as much as you would with a standard mortgage
Home reversion
You sell a share in your property for a lump sum, but you’re able to live in it for as long as you like. However, it’s an extremely expensive way to borrow and you won’t own your entire property anymore
Alternatives to consider
If none of the above are right for you, you may want to think about:
Joint mortgages
You may be able to get a joint mortgage with a younger relative, but there will be caveats. For example, your relative may have to prove that they would comfortably be able to afford the repayments without your help. So, essentially you would be their dependent.
It may be classed as a second home for your relative, which comes with extra costs
Guarantor mortgages
It might be possible to get a guarantor mortgage, where a younger relative is responsible for the mortgage repayments if you’re unable to make them.
This type of mortgage relies a lot on trust and can cause friction and hardship for the guarantor if you stop making your payments, for whatever reason
Downsizing
You may be able to purchase your next property outright if you make money from the sale of your house and downsize or choose a cheaper next home
Pension
It’s possible to take money from your pension as a regular income or a lump sum. You could use this money to buy a home, but remember what you take out now won’t be there for you later in life
How can I improve my chances of getting a mortgage as an older borrower?
Make sure that you have sufficient evidence that you’d be able to comfortably afford your repayments. Back that up with a great credit score which shows that you’re able to borrow money and pay it back on time.
Consider using a broker to find lenders that are more open to older borrowers and think about applying for a shorter mortgage term.
Frequently asked questions
Yes, you’ll still be able to find lenders that offer mortgages to over 65s, but you may have to accept a shorter mortgage term and higher interest rates.
If your mortgage term goes past your planned retirement age, you may have to show the lender evidence of how you’d make your repayments which includes your pension.
It can be, depending on your age. Over 75 is when more and more lenders will be extremely wary of an application, and you may have to seek out a specialist lender or consider another way of buying a home.
Useful links
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
PLEASE NOTE: THE FCA DOES NOT REGULATE MOST BUY TO LET MORTGAGES
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