While getting a mortgage at an older age can look a little different to getting a one in your 30s, it’s absolutely still possible. Let’s look at what lenders consider and what you need to know about getting a mortgage in later life.
How lenders assess older borrowers
If you’re getting a mortgage later in life, lenders will want to know you can afford the repayments, both now and in the future. Here’s what they’ll usually look at:
How your income affects your mortgage
One of the biggest challenges for older borrowers can be a drop in income after retirement. While pensions provide a regular income, they might not be enough to meet a lender’s affordability criteria. This will depend on how much you need to borrow, your outgoings and any equity you already have in your home.
The type of mortgage you choose can also make a difference. For example, with a lifetime mortgage, your income isn’t assessed in the same way it is for a standard residential mortgage.
Working out your affordability
Showing that you can afford your mortgage repayments is important at any age, but affordability can look a little different for older borrowers.
If you’re applying for a standard residential mortgage or a retirement interest-only mortgage, you’ll need to show that you can afford your monthly repayments.
Lenders will look at your current income, any retirement income you’ll receive, as well as your monthly outgoings and existing debts.
They’ll also look at your deposit or the equity you have in your home, as this affects your loan to value (LTV). This is the size of your mortgage compared with your property’s value, and it can affect the deals available to you.
Does your mortgage term length matter
The length of your mortgage term can affect how much you pay each month and the total interest you pay over time.
A longer mortgage term usually means lower monthly repayments, but you’ll pay more interest overall.
A shorter term means higher monthly repayments, but you’ll pay less interest in total.
If you’re planning to retire during your mortgage term, lenders will also want to know how you’ll afford the repayments once you stop working,
This is where getting mortgage advice can help. An adviser can explain which lenders might be more flexible and open to negotiating the terms they offer.
Can you get a mortgage that runs into retirement?
Yes, you can take out a mortgage that runs into retirement, as long as you can afford the repayments.
You might need to show evidence of your pension income, like a pension statement or forecast. If you’re still working, your lender might also want to know when you plan to retire and whether your income is likely to change.
Mortgage options for older borrowers
Getting a mortgage later in life doesn’t mean you’re limited to one type of mortgage. There are a few options you could look at.
Standard repayment mortgage: You pay back both the amount you borrow and the interest each month. Your mortgage will be paid off by the end of the term, as long as you keep up with your repayments.
Retirement interest-only (RIO) mortgage: You pay the interest each month, while the original amount you borrowed is usually repaid when you sell your home, move into long-term care or pass away.
Lifetime mortgage: This is a type pf equity release, usually available to homeowners aged 55 and over. You can borrow against your home without making regular monthly repayments, although interest typically builds up over time.
Remortgaging later in life: if you already have a mortgage, you might be able to switch to a new deal or borrow more against your home. This could help you find a better deal that suits your needs as you get older.
How to improve your chances of getting a mortgage later in life
There are plenty of ways to improve your chances of getting a mortgage later in life.
If you can, reduce your LTV by increasing your deposit to paying off more of your existing mortgage.
It’s also a good idea to check your credit report to make sure everything is up to date, clearing any debt you have as this could improve your affordability.
If you’re applying with a partner or family member, a joint mortgage could be another option, as their income might help support your application.
Why advice is so important
Whatever your age or stage in life, getting the right mortgage advice can make all the difference.
Our advisers are here to talk you through your options and help you find a mortgage that suits your needs and plans for the future.
Have a chat with us to see how we can help you take the next step.
Ready to chat? Our advisers are ready to call you back today. The first chat costs nothing and is totally free of obligation.
Something to bear in mind...
You should always think carefully before securing a loan against your property.
A lifetime mortgage will reduce the value of your estate and can affect whether you can get means-tested benefits.
Clearing an existing mortgage with a lifetime mortgage may result in higher cost of borrowing.
We charge up to £1,295 for later-life mortgage advice.
Frequently asked questions
Yes, you can. If you meet a lender's eligibility criteria, you could get a mortgage at 45. Each lender has its own age restrictions, and some don’t have a maximum age limit at all.
As you get older, lenders might look more closely at how you’ll afford your repayments, especially if your mortgage will run into retirement. While there might still be options available, your choice of mortgages could be more limited.
Not at all! In fact, if you get a 25-year mortgage when you're 50, your mortgage will end when you're 75. As long as your retirement income covers your payments, you could be eligible.
Lifetime mortgages are usually available to homeowners aged 55 and over, although minimum ages can vary. If you’re considering one, speak to an adviser to explore your options.