While it can be harder to get a mortgage in later life, there are plenty of products available for over-50s.
Typically, the closer you get to retirement, the more concerned lenders become about your ability to repay your loan.
However, as life expectancy has risen and more people work later in life, many providers have become flexible about lending to older borrowers and extended their maximum mortgage age limit.
This means getting accepted for a mortgage should be relatively straightforward for over-50s, though you may need to give details about your pension and some providers will limit the maximum term.
The best mortgage for you will depend on your circumstances and attitude to risk. With interest rates currently on the rise, you might prefer to lock in a fixed deal. That way, you’ll be protected from any future rate increases for the duration of your offer.
Alternatively, if you’re happy (and can afford) for your monthly repayments to fluctuate, you could look for a variable deal instead. This will typically offer a lower interest rate compared to fixed mortgages at the outset, but the rate could rise significantly during the deal.
Fixed-rate mortgages offer a rate of interest that remains the same for the length of the deal – typically, two, three or five years – though some deals can stretch to ten.
Because the rate is fixed, your monthly repayments will also remain the same for the length of the deal, making budgeting easier and sheltering you from rate rises.
A tracker mortgage tracks the movements of another financial rate, most often the Bank of England base rate. This means that as the financial indicator goes up or down, so will your mortgage rate and monthly repayments.
Some tracker mortgages have a “floor” or “collar”, which means the rate won’t fall below a given level, even if the base rate does.
With a variable-rate mortgage, the interest rate can change at the lender’s discretion and won’t necessarily follow the Bank of England base rate changes.
Because the interest rate can go up or down, your monthly repayments can change from month to month as the rate moves, so it’s important that you factor this into your budget.
A discounted-rate mortgage offers a percentage discount off your lender’s standard variable rate (SVR), usually for two or five years.
For example, if your mortgage offers a 1.5 percentage point discount and the SVR is 4%, your interest rate would be 2.5%. This means that your mortgage rate will rise and fall by the same amount as the lender’s SVR.
Fixed-rate mortgages offer a rate of interest that remains the same for the length of the deal – typically, two, three or five years – though some deals can stretch to ten.
Because the rate is fixed, your monthly repayments will also remain the same for the length of the deal, making budgeting easier and sheltering you from rate rises.
A tracker mortgage tracks the movements of another financial rate, most often the Bank of England base rate. This means that as the financial indicator goes up or down, so will your mortgage rate and monthly repayments.
Some tracker mortgages have a “floor” or “collar”, which means the rate won’t fall below a given level, even if the base rate does.
With a variable-rate mortgage, the interest rate can change at the lender’s discretion and won’t necessarily follow the Bank of England base rate changes.
Because the interest rate can go up or down, your monthly repayments can change from month to month as the rate moves, so it’s important that you factor this into your budget.
A discounted-rate mortgage offers a percentage discount off your lender’s standard variable rate (SVR), usually for two or five years.
For example, if your mortgage offers a 1.5 percentage point discount and the SVR is 4%, your interest rate would be 2.5%. This means that your mortgage rate will rise and fall by the same amount as the lender’s SVR.
The amount you can borrow for a mortgage depends on your financial circumstances, the size of your deposit and your credit history. The larger your deposit and the better your credit score, the more you are likely to be able to borrow.
Lenders will also consider your monthly income and outgoings, with most providers using an income multiple of 4 to 4.5 times your salary to determine how much they will offer you.
If you’re likely to retire before the end of your mortgage term, you will also need to show evidence of your predicted retirement income. Your lender needs to be comfortable that you will still be able to afford your monthly mortgage repayments once you no longer have a regular salary. Other potential income sources could include investments, shares and buy-to-let property.
Many lenders are willing to offer 25-year mortgage terms to those over the age of 50, but you may have to accept a shorter term in some cases. If that’s the case, your monthly repayments will be higher than those on a 25-year term, so you’ll need to show you can comfortably afford to pay off your mortgage within this shorter time span.
If you’re applying for a joint mortgage, some lenders will also want to see evidence of how you or your partner would pay back the loan if one of you were to die. For this reason, some mortgage providers may insist that you have a life insurance policy in place before offering you a mortgage, and they will factor your life insurance premiums into their affordability calculations.
Not all lenders have age limits, but those that do tend to set them in two different ways. Either they will have a maximum age at which you can apply and take out a new mortgage, or they will have a maximum age for when the mortgage term ends.
For instance, some providers won’t lend to anyone over the age of 70 to 85, others say you need to have paid off your loan before you reach the age of 75 to 95.
Some lenders have no age limits at all, but these are more rare.
As you get older and closer to retirement, lenders typically become more nervous about your ability to repay your mortgage. After all, once you’ve retired, you’ll no longer be receiving a regular salary from your job, and while you might have a pension to fall back on, it can be difficult for lenders to assess exactly how much you’ll get. Whether you get accepted for a mortgage can therefore depend on the length of time you are likely to continue receiving your full salary and how likely you are to be able to afford your repayments once you’ve retired. For example, if you’re currently 50 years old and don’t plan to retire until you’re 70, it should be relatively straightforward to be accepted for a mortgage, even with a 25-year term. But if you’re 55 and plan to retire at 60, lenders may be more comfortable offering you a shorter 10- or 15-year mortgage term. There’s also a greater risk of developing health problems as you get older, which could mean you’re less likely to be able to repay a 25-year mortgage.
Affordability is key when applying for a mortgage, so try to demonstrate that you will be able to afford your repayments every month. You’re more likely to be accepted if you show you will continue to earn a full salary and/or that you have adequate retirement income to cover the repayments. This could be through pension forecasts or other income, such as investments or buy-to-let properties. Make sure you gather all the information you need, including your state pension entitlement and any annuity statements.You can also improve your chances if you reduce your debt-to-income ratio by paying off any other debts, such as credit cards and loans, as well as lowering your monthly outgoings where possible. Checking your credit report for free via credit reference agencies is also a good idea. If you spot any mistakes on your report, get them corrected as soon as possible. Finally, shop around and compare your options carefully, as some lenders are more flexible than others and their maximum age for mortgages may differ. Consider speaking to a broker who may be able to find you specialist deals.
The majority of banks and building societies offer mortgages to those over the age of 50, so it’s unlikely you’ll need to approach a specialist lender. However, lenders may have different terms about when your mortgage needs to be repaid, so do check.
NatWest, for example, offers mortgages to those over 50, but borrowers must repay the loan by the age of 70. Borrowers must pay off mortgages with HSBC and Santander by the time they reach 75, while Halifax extends this to 80.
Leeds Building Society allows borrowers to be up to 85 at the end of their mortgage term.
Yes, you can still get a buy-to-let mortgage if you’re over the age of 50. In fact, some lenders offer higher maximum age limits for buy-to-let mortgages compared to residential deals, as well as terms of up to 40 years.
When assessing your application for a buy-to-let mortgage, lenders typically require rental income to be at least 125% of your mortgage repayments (on an interest-only basis).
This depends on the mortgage lender but will typically be somewhere between the age of 70 and 95. Some lenders, such as Loughborough, Suffolk and Cambridge building societies, have no upper age limit.
Yes, you can get a mortgage after you retire, as long as you can prove to the lender that you can comfortably afford your monthly repayments. There are also more specialist products to consider, such as a retirement interest-only mortgage.
These are designed for those aged 55 and over and work similarly to a standard interest-only mortgage, meaning you only pay back the interest, not the capital each month. The loan is then repaid when you move into long-term care, sell the home or pass away.
This will depend on the lender and may be impacted by when you plan to retire. Some offer a term of 25 years, while others will only offer terms of 10–15 years.
Loughborough Building Society has no upper age limit, which means you can take out a mortgage for up to 35 years regardless of your age at the time of application.
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