The closer you get to retirement age, the harder you could find it to secure a mortgage. However, as the population gets older and more of us are working for much longer, there are more mortgages out there that could work for you even as you get older.
What Is The Age Limit For Getting A Mortgage
Each mortgage lender will set their own age limit for mortgage applicants. In most cases, this limit is either:
- Your age when you take out the mortgage, with the limit ranging from around 70 to 85
- Your age when the mortgage term ends, with the limit ranging from around 75 to 95.
No matter how old you are when you take out a mortgage, you will need to be sure that you can afford the repayments throughout the full term of the mortgage, including any outstanding balance that remains after you have retired. A mortgage broker, like Avail Mortgages, can help you find a mortgage suitable for your age.
If you are having issues with age limits or repayments, you could look at a lifetime mortgage, which is a kind of equity release. However, you will need to keep in mind that releasing equity in your property can have an impact on how eligible you are for some benefits, and what your estate will be worth when you die.
Some lenders offer retirement interest-only (RIO) mortgages, which means you will only pay off the interest, keeping your repayments lower. The loan amount will be paid off when the last borrower moves into long-term care or dies.
Can I Get A Mortgage After I Retire?
If you have retired, you could still be able to get a mortgage. A lender should still accept you for a mortgage if they feel confident that you will be able to pay back your loan each month. You can improve your chances if:
- You have a good amount of savings for a deposit
- You have a strong credit score
- You own your current home outright. If you do, you will be able to access some of the money that is tied up in that property. You could use this as an up-front payment on another home or released as a cash lump sum with a lifetime mortgage. With this kind of mortgage, you won’t have any required monthly repayments, so you won’t need to prove an ongoing income to your lender. However, remember that this could affect the value of your estate and entitlement to any means-tested benefits.
- You can show a lender proof of ongoing income, such as a private pension or earnings from investments or shares.
As you get older, it’s likely that you have a longer history of borrowing behind you, which could help you to get a mortgage now. If you have already proven that you have been responsible with your money in the past, so you might be viewed in a more favourable way by a mortgage lender.