Mortgages for over 50s
The closer you get to retirement, the harder you might find it to get a mortgage. But with an ageing population and more people working for longer, there are mortgage deals that could meet your needs in later years. We take a look at the key points.
How does my age affect my mortgage eligibility?
Your age is one factor that mortgage lenders look at to decide if you’re eligible for a mortgage. If you’re over 50 and approaching retirement, lenders may see you as a greater risk. That’s because once you retire, you won’t receive a regular salary. And even if you’ll be getting a pension, you’re likely see a drop in your income.
Mortgage lenders are also aware that people over 50 are more likely to suffer from health issues, which may mean you’re less likely to pay back your mortgage in full.
For these reasons, mortgage lenders normally place age limits on their mortgage deals. That’s not to say you can’t find a mortgage if you’re over 50, or even after you’ve retired. As with any mortgage, you’ll have to prove to the mortgage lender that you can afford the repayments, potentially within a shorter repayment term.
What is the age limit for getting a mortgage?
There’s no overarching maximum age limit on getting a mortgage in the UK, but mortgage lenders normally set their own age limits.
Typically, this is either:
- Your age when you take out a new mortgage, with the limit ranging from around 65 to 80
- Your age when the mortgage term ends, with the limit ranging from about 70 to 85.
You may find some lenders who don’t impose upper age limits on their mortgages or who are willing to lend to older borrowers on a case-by-case basis. This could be the case with smaller, local banks or building societies.
Regardless of how old you are when you take out a mortgage, you’ll need to be sure you can afford the repayments throughout the full term, including on any outstanding balance after you retire.
Can I get a mortgage after I retire?
You can still get a mortgage after you’ve retired, but you might have fewer options to choose from. A lender should accept you for a mortgage if they’re confident that you’ll be able to pay back your loan each month.
It should help to get a mortgage if:
- You have a decent amount of savings for a deposit.
- You have a strong credit score – you can check your credit report for free.
- You own your current home outright – if you do, you’ll be able to access some of the equity (money) that’s tied up in your current property. This could be used as an up-front payment on another home.
- You can show a lender proof of any ongoing income. Examples could include a private pension, or earnings from shares or other investments.
It’s likely that you’ll have a longer history of borrowing as you get older. So, if you’ve proven to be responsible with your money in the past, you might be viewed more favourably by a lender.
The older you are, the stricter the lending criteria
Typically, as you get older, you’re likely to be offered a shorter repayment period on a mortgage than a younger borrower would (typically, mortgage terms last 25 years). You might also find that you’re offered fewer deals. For example, it might be harder to find interest-only mortgages, which tend to have lower monthly repayments.
If you’re an older borrower and you still have a few years left on your current mortgage, you might want to think about remortgaging instead of finding a new deal. However, while you might be offered better terms by your current lender, you’ll still need to meet their eligibility requirements.
Expert view from David Hollingworth at London & Country Mortgages
“As many of us are living and working for longer, there’s likely to be an increasing need for more flexibility around lending to people in later life. Although the ideal situation is to repay your mortgage by the time you reach retirement, some older homeowners will have a good income that can cover a monthly mortgage payment.
“Thankfully, lenders are realising that more flexibility around the maximum age at the end of the mortgage term can work for some borrowers. Retirement interest-only mortgages offer another alternative for the right borrower.”
How much can you borrow when you’re over 50?
The amount you can borrow depends more on your financial circumstances than your age, particularly if you’re still years away from retirement. Lenders will consider your monthly income and outgoings, as well as how big a deposit you have.
If you’re over 60, you may only be able to apply for shorter mortgage terms of 10-15 years, while over 70s who have retired may face even tighter restrictions.
A shorter loan should be cheaper overall, but the monthly repayments are likely to be higher than a standard 25-year mortgage, so you’ll need to show you can comfortably afford to pay off the mortgage in a shorter time span. The amount you could borrow may be limited and you’ll probably need a substantial deposit.
However, there are lenders who are flexible and will make a decision based on your personal circumstances, regardless of your age.
When comparing mortgage rates, it’s important to have an idea of what you can afford. Use our mortgage calculator to work out how much you might be able to borrow.
Which lenders offer over 50s mortgages?
Most banks and building societies offer mortgages for people over the age of 50, including Nationwide, Lloyds, Halifax and NatWest. If you’re in your early 50s and still in full-time employment, you’re likely to have a good choice of deals – whether you’re a first-time buyer or remortgaging your home. However, your options become more limited the older you get and the less income you receive.
What type of mortgages are best for over 50s?
Finding the best mortgage deal depends on how much you’re looking to borrow and for how long, but if you’re over 50 you could choose from all types of mortgage, including:
- Fixed-rate – this type of mortgage has a fixed interest rate for an agreed period, varying from one to 10 years. Your monthly repayment won’t change during this time but will revert to your lender’s standard variable rate (SVR) once the fixed rate ends, unless you remortgage to a new deal.
- Variable – the interest rate you pay each month can go up or down, depending on the lender’s mortgage rate.
- Tracker – with this type of mortgage, the interest rate is tied to the Bank of England base rate. Most tracker mortgages have terms of two or five years.
- Discount – this offers a discount on the lender’s SVR, normally for a set term of one to five years. Monthly repayments could fall as well as rise.
There are also mortgage products designed specifically for older borrowers, for example:
- Lifetime mortgage – this type of equity release mortgage allows you to release some of the equity in your home, as a tax-free lump sum to do with as you will.
- Retirement interest-only (RIO) mortgage – you only pay the interest on your mortgage. The loan amount is usually paid off when the last borrower moves into long-term care or dies.
How can I increase my chances of getting a mortgage over 50?
You need to show potential lenders that you have a solid plan for paying back the money. Before you make your application:
- Make sure all your bills are paid on time.
- Cut down on any unnecessary outgoings.
- Check your credit report and have any mistakes corrected – you can do this for free via the credit reference agencies TransUnion, Equifax and Experian, as well as some banks. Find out more about free credit checks.
- Avoid taking out other loans too close to your application.
If you’re making a joint mortgage application, you’ll also need to consider how your partner would pay back the loan if you were to die.
What will I need to show my mortgage provider?
You’ll need to show evidence of your current income. If the mortgage term is going to extend into your retirement, you’ll also need to provide evidence of what your retirement income will be – a pension forecast, for example.
And you’re likely to have to show your bank statements. A mortgage lender will look at your regular expenses to decide how much you can afford to borrow.
Can I get equity release as an older borrower?
There are two common types of equity release
- Lifetime mortgage – you take out a mortgage on your main residence in return for a cash lump sum or smaller multiple pay-outs, but continue to own your home. You can either make repayments or allow the interest to roll up. The loan is paid off when you die or go into long-term care and the property is sold. Eligibility starts at age 55.
- A home reversion plan – you sell all or part of your home in exchange for a single payment or regular cash payments. You can continue to live in your home until you die or move into long-term care. Eligibility usually starts at age 60-65.
These types of mortgages can be a way of freeing up equity in your home to get a tax-free lump sum. This might be useful in supporting your retirement, but releasing equity may affect your tax position and what your estate is worth when you die. Also, having more cash might impact your eligibility for means-tested state benefits.
Can I port my mortgage if I move home?
Porting your mortgage means taking it with you when you move house. Technically, this is a new loan so you’d need to reapply – and if you’re over 50, this might not be straightforward.
If your lender’s eligibility criteria has changed – they’ve lowered their age cap, for example – or if you’re approaching retirement and your income is going to fall, you could be turned down.
But porting your mortgage may not be the best option in any case. It may be better to switch to a different lender or to take out a new deal with your current lender. It’s worth checking out all your options.
What can I do if I can’t get a mortgage?
Different lenders have different criteria, so it pays to shop around. For fee-free mortgage advice, talk to our partners, London & Country Mortgages Ltd (L&C)**.Go to L&C mortgages
About London & Country Mortgages Ltd (L&C)
**London & Country Mortgages Ltd (L&C) are a multi-award-winning mortgage broker with over 20 years’ experience in helping people secure their perfect mortgage. Advice is provided by L&C, who are authorised and regulated by the Financial Conduct Authority (143002).
L&C are not part of Compare the Market Limited. Compare the Market receive a % of the commission that our partner London & Country earns. All applications are subject to lending and eligibility criteria.
L&C will not charge you a broker fee should you decide to proceed with a mortgage.
Frequently asked questions
Can I get a buy-to-let mortgage if I’m over 50?
Depending on your circumstances, you should be able to find buy-to-let mortgages available to borrowers over the age of 50. As with other types of mortgages, lenders will likely have a maximum age limit in place and you’ll need to meet their lending criteria to secure the loan.
Can I get a mortgage if I’m over 50 and self-employed?
So long as you can prove that you’ll be able to afford the repayments, you should be able to find mortgage deals that work for you. Mortgage lenders will need to see evidence of your self-employed income, typically over one or more years, as well as your regular expenditure, to see what you can afford to borrow. They’ll also check your credit score to assess your creditworthiness.
If you’re approaching retirement age, you may also need to show a pension forecast that proves you’ll be able to keep up with repayments once your income stops.
How many years’ mortgage can I get at age 50 or over?
It depends on your age and the upper age limits the mortgage lender has in place. For example, if you’re applying for a mortgage at the age of 55 and the mortgage lender has an upper age limit of 75, you could be offered a mortgage term of 20 years, so long as you meet the lending criteria. If you’re applying at 60, you’d need to prove you could afford to repay in a shorter time scale of 15 years.
Is the mortgage application process the same for over 50s?
The mortgage application process is typically very similar, regardless of your age. The main difference is that as you reach or approach retirement age, mortgage lenders will want to see pension forecasts to assess your ability to repay your mortgage once your regular income stops.
The content written in this article is for information purposes only and should not be taken as financial advice. If you require support on the products discussed here, please speak to your bank/lender or seek the advice of an independent professional financial advisor. We also have more information on our Customer Support Hub.