Mortgages for Older Borrowers – finding a suitable deal

It can surprise a lot of people that once you get past the age of 50, it can be more challenging to get a mortgage. Why is this, and what are the options for achieving your property goals?

What is the age limit for getting a mortgage?

It’s common for mortgage lenders to set upper age limits on their mortgage products. The reason is that mortgages are long term loans, usually lasting 25 years or more. A lender will set a limit to make sure the debt is fully repaid by the time you reach 75 or 80. 

But every lender is different, and some don’t set upper age limits at all. It’s our job to help you explore the options.  

Can I get a mortgage at 60?

We can almost certainly find you a mortgage at 60, provided that you have enough income to meet the monthly repayments – and that this will continue into retirement. There are a few things to consider when getting a mortgage at an older age:

• shorter mortgage terms – by reducing the mortgage from the standard 25 years to 10 or 15 years, you will stay within age limits. The downside is that the mortgage repayments will be considerably higher.

   

• Putting down a large deposit – this reduces the risk to the lender and makes you a more appealing customer.

   

• Finding a specialist lender that is happy to lend to older people, or one that will underwrite a mortgage deal specifically tailored to your financial situation.

   

Why can it be harder to get a mortgage when you are older?

The main reason that mortgage lenders are more wary of taking on older customers is that you’re likely to retire at some point during the mortgage term. This may reduce your income. Lenders have to follow strict rules to make sure that their customers can afford to repay the loan throughout the term of the mortgage. There is also the risk that you could pass away before the mortgage is repaid. 

Can you get a mortgage after you retire?

Yes, you can take out a mortgage after retirement, or get a mortgage that you will continue to repay once you have retired. 

The lender will need to confirm that you have enough pension income to cover the repayments on the mortgage. You will need to ask your pension provider to confirm your current pension value and your projected retirement income. It can also help if you have other income from investments or rent from property you own.

What are the most suitable mortgages for older borrowers?

There are a variety of mortgage types available to you as an older borrower:

• Repayment plans – As we have already mentioned, various lenders will consider you for standard mortgages where you repay the debt over time. You will need to meet their affordability calculations and criteria.

   

• • Retirement interest-only mortgage – this is a special type of mortgage for older borrowers where you only pay the interest due each month. The loan is repaid in full from your estate after you die, or should you decide to sell the property.

     

• Equity release, also known as a lifetime mortgage. This is a way of unlocking the value from your home, provided you have a certain amount of equity. You can mortgage a proportion of your home in exchange for a lump sum or income drawdown. You do not have to make any monthly mortgage repayments.

   

• Hybrid equity release – Here, you make a monthly repayment to cover the interest owed on your equity release product. There are a lot of options to consider with equity release, so it’s very important to talk to a specialist.

The right mortgage will depend on your specific situation and property plans – and particularly whether you want to buy a new or additional property or just remortgage your current home? Our mortgage brokers will sit down with you to explore your goals and make personal recommendations based on your situation.  

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

How can Mortgages by McAteer help you?

Our team are experienced mortgage professionals, and it’s our job to explore your property goals and how best you can achieve them. We help people at every stage of life, from First Time Buyers to those looking to move home, people needing a remortgage or considering their property situation in later life. 

We’ll compare mortgage deals, interest rates and fees to recommend the most suitable approach. There are many lenders that only do business via brokers, especially the more specialist providers. We’re here to support you through applying for a mortgage and managing stamp duty and conveyancing, right through until completion. 

Mortgages by McAteer Ltd is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority. We are registered in England.

You will need to take legal advice before releasing equity from your home as Lifetime Mortgages and Home Reversion plans are not right for everyone.  This is a referral service.