As you reach age 50, your mortgage options begin to shift. While it’s still possible to purchase a property at or near retirement age, it’s important to understand how age can influence borrowing when you come to take a mortgage.
Age and Mortgage Eligibility
Many mortgage providers set maximum age limits, which vary depending on the lender. However, some lenders specialise in later-life mortgage products, and we can help guide you to the right options.
This page will cover the impact of age on mortgage applications, how your options change over time, and an overview of specialist retirement mortgage products. For more detailed information, contact us for individual advice.
Why Age Affects Mortgage Eligibility
As you age, mainstream mortgage providers may view you as a higher risk, making it more challenging to secure a loan. This increased risk often stems from decreased income and potential health issues as you near retirement.
After retirement, your income typically decreases and becomes less predictable, which can affect your borrowing power. Additionally, older individuals face higher health risks, reducing the likelihood of surviving a standard 25-30 year mortgage term. Therefore, maximum mortgage age limits are often in place to mitigate these risks and protect the borrower from having a mortgage they may not be able to afford.
Other Factors Affecting Mortgage Eligibility in Retirement
Beyond age, several factors influence mortgage eligibility:
Affordability: Lenders assess your ability to make monthly repayments, especially if your mortgage term extends into your retirement years. You may need to prove that your pension will cover the repayments.
Term Length: Many UK lenders have age caps for new mortgages (typically 65-70 at application) and for paying them off (usually 70-80). This can limit term lengths for older borrowers, but some niche lenders may offer more flexible terms.
Loan to Value (LTV): Higher deposits result in lower LTV, offering more lender choices and competitive rates. For interest-only plans, LTV limits tend to be lower for older applicants due to the potential need to downsize sooner.
Other factors include the type of property and your credit history. Non-standard construction types and poor credit scores can make securing a mortgage more difficult, though specialist lenders might still consider your application.
Find out Your Options
Maximum Age for Mainstream Mortgages
Age can limit your mortgage options. Here’s a summary based on age milestones:
Mortgages for Over 50s
In your 50s, you can still access standard 25-year terms and competitive rates with some lenders. This is a good time to consider your mortgage options before retirement impacts your income. With retirement still being a long way off, depending on your role, there are still lenders that can lend up until age 80 based on just earned income if the situation is feasible.
Mortgages for Over 60s
In your 60s, lenders will likely require proof of pension income and may require this to be enough to support the mortgage post-retirement exclusive of earned income. Standard term lengths may not be available, but some exceptions exist.
Mortgages for Over 70s
Options are more limited, with shorter term lengths (10-15 years) being common. Guarantor mortgages or niche lenders may provide additional options.
Mortgages for Over 80s
Options are very limited, but some niche providers might consider your application. Expect thorough scrutiny of your finances and shorter term lengths, or if your pension income fully fits affordability for the borrowing amount.
Alternative Later Life Mortgage Options
If you meet eligibility criteria, there are various mortgage types available to those aged 50+:
Lifetime Mortgage: A form of equity release available from age 55, allowing you to retain ownership of your home. The loan and interest are repaid when you pass away or move into long-term care.
Home Reversion: Sell part or all of your home to a provider in exchange for payments or a lump sum, while living in the property rent-free until you die.
Retirement Interest-Only Mortgage (RIO): Similar to standard interest-only mortgages but repaid upon selling the property, passing away, or moving into long-term care. Minimum age requirements typically range from 50 to 60 and monthly payments must be made.
Speak to an Expert Mortgage Advisor
If you’re approaching retirement or already retired, hopefully this page has helped you to see that you should still have mortgage options. Our team has access to a range of high street banks and niche providers specialising in later life lending. Contact us on 01252 224620 or email info@kerrandwatson.co.uk.
