It can be more difficult, but it’s certainly not impossible to get a mortgage when you’re older. This guide covers how to apply for a mortgage as an older borrower, which lenders have the most lenient mortgage age limits, and how to determine which option best fits your needs. Share this guide.
Latest mortgage statistics show that many people are choosing to buy their first home later in life. This is primarily because living expenses have increased overall and for real estate, taking up a larger portion of the average income than in previous generations.
The good news is that some lenders have extended the maximum age at which a mortgage must be repaid, indicating that the UK mortgage market is gradually adjusting to this and the country’s ageing population.
We look at the mortgage options available to people over 55. There are many mortgages available these days for older borrowers.
Are you considering buying a home in the UK, but worried about your age? While there’s no official age limit on getting a mortgage, lenders do have their own policies, which can vary depending on your circumstances. Let’s dive into the details and explore what you need to know about getting a mortgage later in life.
Key Considerations for Older Borrowers:
- Income: Lenders are concerned about your ability to repay the mortgage after retirement, so they will want to see evidence of a reliable income, such as a pension or investment income.
- Affordability: Your age can impact your affordability, especially if you’re approaching retirement and your income may decrease. Lenders will assess your debt-to-income ratio and may offer shorter mortgage terms to mitigate risk.
- Term Length: Maximum age limits often apply to the age at which you must repay the mortgage, not just the age at which you can take it out. This means you may need to choose a shorter term, resulting in higher monthly repayments.
- Loan to Value (LTV): The higher your deposit, the lower your LTV, which can improve your chances of approval and potentially offer more competitive interest rates.
Navigating Age-Related Challenges:
- Maximize Your Deposit: A larger deposit can significantly improve your affordability and LTV, making you a more attractive borrower.
- Consider a Guarantor: If you have a younger relative willing to act as a guarantor, they can provide additional security for the lender.
- Downsize Your Property: Moving to a smaller, more affordable property can reduce your borrowing needs and improve your affordability.
- Explore Specialist Mortgage Options: Retirement interest-only mortgages, lifetime mortgages, and home reversion plans are specifically designed for older borrowers.
Maximum Age Limits by Lender:
- Loughborough, Suffolk, and Cambridge Building Societies: No upper age limit.
- NatWest: Maximum age of 70 to repay the mortgage.
- HSBC: Maximum age of 75 to repay the mortgage.
- Halifax: Maximum age of 80 to repay the mortgage.
- Leeds Building Society: Maximum age of 85 to repay the mortgage, but borrowers must be 80 or younger at the time of application.
Remember:
- Get Expert Advice: A mortgage broker can help you navigate the options and find the best mortgage for your circumstances.
- Shop Around: Compare different lenders and mortgage products to find the most competitive rates and terms.
- Be Realistic: Consider your financial situation and choose a mortgage that you can comfortably afford.
Additional Resources:
- Uswitch Guide on Getting a Mortgage When You’re Older: https://www.uswitch.com/mortgages/guides/getting-a-mortgage-when-youre-older/
- The Mortgage Hut Guide on Maximum Age for Mortgages: https://www.themortgagehut.co.uk/expert-articles/ask-the-expert/218/maximum-age-for-mortgage
It is possible to obtain a mortgage later in life, but it takes careful thought and preparation. You can improve your chances of obtaining the ideal mortgage for your requirements by being aware of the difficulties and considering your options.
Best mortgage types for older borrowers
Retirement interest-only mortgages are aimed at those aged 55 and over, although some lenders accept applicants at 50.
They function similarly to a regular interest-only mortgage in that you only have to pay back the interest each month—not the entire loan. The loan is usually repaid when you pass away, move into long term care or sell your home.
Older People’s Shared Ownership
Older People’s Shared Ownership schemes are available exclusively to those aged 55 and over. You can purchase a share of a property between 2010 and 2575 percent of the total value, and then pay rent to the housing association that owns the remaining portion.
After you acquire 25% of the property, you will no longer be required to pay any additional rent; however, you will not be the full owner of the property, as the housing association will keep the remaining 25% of the property.
Equity release products are another mortgage option available to older borrowers.
Even though they might be a good option for some, it’s important to get guidance from an Equity Release Council (ERC) certified broker because this type of borrowing isn’t suitable for everyone:
A lifetime mortgage is available to those aged 55 and above. This entails taking out a loan against the value of your house, which you must repay when you pass away or enter long-term care.
Over the course of the loan, there is no requirement to repay the amount; however, if you choose not to, interest will be added to the loan. This leads to compounded interest, which can reduce the overall value of your estate for inheritance purposes.
Few lenders currently provide home reversion plans, a less popular kind of equity release product.
They give you the option to sell all or a portion of your house to a home reversion provider, who will pay you less than market value in exchange for a one-time payment or ongoing benefits. When you pass away or enter care, they sell your house to pay back this loan, but you are still allowed to live there rent-free for the remainder of your days.
Maximum age to get a mortgage – What is the age limit for getting a mortgage?
FAQ
Can a 60 year old get a 30-year mortgage?
Can an 80 year old get a mortgage in UK?
At what age will the bank not give you a mortgage?
Can a 44 year old get a 30-year mortgage?
What is the maximum age you can take out a mortgage?
Each lender usually has their own mortgage age limit. The maximum age you can take out a mortgage is between 65 to 80 years old, on average. The average maximum age a mortgage must be paid off is between 70 to 85 years old.
Is there an age limit for mortgages in the UK?
Contrary to the common misconception, there isn’t a strict upper age limit for mortgages in the UK. Age does shape your mortgage landscape, but it’s certainly not the be-all and end-all of your borrowing journey. As you age, your mortgage options may evolve. But they certainly don’t disappear.
Do all lenders have a maximum age limit?
Although not all lenders have a maximum age on their mortgages, with a few, such as Loughborough, Suffolk and Cambridge building societies, having no upper age limit. Rather than having a maximum age at application, most lenders maximum age limit refers to the age by which the borrower must have repaid their mortgage.
How old do you have to be to get a mortgage?
Individual factors such as income, employment status, and credit history influence eligibility. Some lenders might also stipulate an age limit at the point of application, such as Kensington Mortgages, which states that borrowers can’t be over 55-years-old at the application stage, and for professional mortgages this age reduces to 40.