Mortgages for over 50s

Mortgages for over 50s are designed to suit older borrowers as well as those heading into (or already in) retirement.

Whether you’re simply remortgaging, moving home, helping your kids out financially or just want to free up some cash, there’s a broad range of options including:

• Standard repayment mortgages 

• Retirement interest-only (RIO) deals 

• Equity release (often called ’later life‘ mortgages). 

As with all borrowers regardless of age, lenders want to see that you’ll be able to afford a mortgage whether you’re earning a salary, drawing a pension, or both.

Your age plays a major part in any lender’s decision on your eligibility for a mortgage. If you’re over 50 and approaching retirement, lenders may see you as a greater risk due to:

• Income – once you retire, your regular salary stops. Even if you have a decent pension lined up, it often doesn’t match the size of your work payslip

• Health – people over 50 are more likely to suffer from health issues, which could mean you’re less able to pay back your mortgage in full.

For these reasons, lenders normally place age limits on their mortgage deals.

However, if you’re over 50 or retired and searching for a mortgage, you should still be able to pick from plenty of options. As with any mortgage, you’ll need to show you can afford the repayments but over a possible shorter term.

There’s no blanket maximum age limit for taking out a mortgage in the UK.

Mortgage lenders tend to set their own age limits and this is usually 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.

However, these age bands are only a guidance. Some lenders – such as smaller, local banks or building societies – can be more flexible and are willing to look at older borrows on a case-by-case basis.

Yes, you can still get a mortgage after you’ve retired – but your options may be more limited. A lender should accept you for a mortgage if it is confident that you’ll be able to pay back your loan each month.

You’ll have a better chance of getting a mortgage after retiring if you have:

• A good chunk of savings for a deposit 

• A strong credit score. You can check your report for free with any UK credit reference agency (CRA).

• A property that you already own outright – you could tap into some of the equity (money) in your property to use as an up-front payment on another home 

• Proof of any regular income such as a private pension or earnings from shares or other investments.

It’s common to have a longer history of borrowing as you get older. So if you’ve been a sensible borrower over the years, lenders should more readily trust your ability to manage the repayments.

The older you are, the stricter the lending criteria

As you get older, you can usually expect a different approach from lenders:

• You’re likely to be offered a shorter mortgage repayment period than a younger borrower (standard mortgage terms typically last at least 25 years)

• You might find you’re eligible for fewer deals. For example, it might be harder to get interest-only mortgages, which tend to have lower monthly repayments.

Still have a few years left on your current mortgage? It could pay to consider remortgaging instead of finding a new deal.

The amount you can borrow when you’re over 50 is less about your age and more about your finances – especially if you’re still years away from retirement. Lenders will look at:

• Your monthly income 

• Your outgoings  

• 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. And if you’re over 70 and retired, you may face even tighter restrictions.

However, a shorter loan can be a plus because:

• You should pay less interest overall 

• The mortgage will be cleared sooner.

But keep in mind:

• The monthly repayments will likely be higher than for a standard 25-year mortgage 

• You’ll need to show you can comfortably afford those payments 

• You may be limited in how much you can borrow 

• A bigger deposit might be needed. 

Helpfully, a number of lenders are flexible and base their decision on your personal circumstances - no matter 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.

Most banks and building societies offer mortgages for over 50s, including:

• Nationwide 

• Lloyds 

• Halifax 

• NatWest.

If you’re in your early 50s and still in full-time employment, you should have a good choice of deals – whether you’re a first-time buyer or remortgaging your home.

But mortgages tend to become more limited the older you get and the less income you receive.

And while some lenders will offer you a mortgage if you’re over 50, they may expect this to be fully paid off by the time you intend to retire.

When it comes to finding the best mortgage deal for over 50s, there’s no one-size-fits-all. It all depends on the type of deal you’re most comfortable with, how much you’re looking to borrow and for how long.

If you’re over 50 you could choose from most types of mortgages, including:

• Fixed-rate – the interest rate stays the same for an agreed time, usually between one and 10 years. Once the fixed rate ends, you’ll move to your lender’s standard variable rate (SVR), unless you remortgage to a new deal

• Variable rate – the interest rate you pay each month can go up or down depending on your lender’s rate. This means your payments might change over time

• Tracker – the interest rate follows the Bank of England base rate and sits a fixed percentage above it. Most tracker mortgages have terms of two or five years

• Discount – offers a discount on the lender’s SVR, typically for one to five years. Monthly repayments could fall as well as rise.

You can also find mortgage products designed specifically for older borrowers. These either let you release money from the property’s value, or allow you to lower your mortgage payments. Examples include:

• Lifetime mortgage – a type of equity release that lets you unlock some of the value in your home as a tax-free lump sum. The loan is usually paid off when you sell the house, go into care, or pass away

• 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 passes away.

To improve your chances of a mortgage over 50, you need to show lenders you have a solid plan for paying it back.

Before you make your over 50s mortgage application:

• Ensure you pay all your bills on time

• Cut down on any unnecessary outgoings

• Check your credit report and have any mistakes corrected

• Avoid taking out other loans close to your application.

If you’re making a joint mortgage application, you’ll also need to think about how your partner would pay back the loan if you were to die.

When applying for your mortgage, you’ll need to show your provider:

• Evidence of your current income 

• Proof of your retirement income, such as a pension forecast (if your mortgage will run into retirement) 

• Bank statements so your lender can look over your expenses and figure out what you can realistically afford to borrow.

Yes, you could consider equity release as an older borrower but you’ll need to be at least 55. There are two common types of equity release:

Lifetime mortgage

You take out this specialist mortgage on your main residence – receiving cash as a single lump sum or a series of smaller pay-outs – and continue to own your home.

You can then choose to make repayments or pay nothing and let the interest roll up instead. The outstanding loan is then paid off when you pass away or go into long-term care, and the property is sold. Eligibility starts at age 55.

Home reversion plan

You sell all or part of your home in return for a one-off payment or regular income. You can continue to live in your home until you die or move into long-term care. Eligibility usually starts at age 60-65.

Both options can give you access to a tax-free lump sum, which can be a boost for retirement, home improvements or helping your family with their own finances. Just keep in mind that releasing equity could affect:

• How much your estate is worth when you die 

• Your tax status 

• Your eligibility for means-tested benefits.

Porting your mortgage means taking it with you when you move house.

Even though you’re ‘taking it with you’, it’s technically treated like a new mortgage application. This means you’ll need to go through the approval process again - and if you’re over 50, this process could turn out to be a bit trickier if:

• Your lender has tightened their eligibility, such as a lower age cap 

• You’re close to retirement and your income is set to drop.

In those cases, your lender might say no. But porting your mortgage may not be the best route in any case, so it’s worth checking out all your options. For example, it may be better to:

• Switch to a different lender, or 

• Take out a new deal with your current lender.

Different lenders have different criteria, so it’ll help to be able to compare deals to find what works best for you. For fee-free mortgage advice, talk to our partners, L&C Mortgages Ltd**.

About L&C Mortgages Ltd

**L&C Mortgages Ltd 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 L&C 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.

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