Compare over 65s mortgages

Many banks and building societies offer standard residential mortgages to those aged 65 and over, which may be suitable if you want to move home or remortgage to a better deal.

However, depending on the lender, you may need to settle for a shorter term of 10 to 15 years, compared to the standard 25 years.

If that’s the case, your monthly repayments will be higher and you’ll need to show the lender that you can comfortably afford to pay off your mortgage within this shorter timeframe.

In the majority of cases, your mortgage will be offered on a repayment basis, which means you repay a portion of the capital (the amount borrowed), plus interest each month.

As long as you meet all your monthly repayments, your entire loan will have been repaid by the end of the mortgage term.

A few lenders might also offer you a standard interest-only mortgage, whereby you only repay the interest each month.

But this means you’ll need to pay off the capital in one go at the end of the mortgage term and your lender will ask to see evidence of how you plan to do this.

There are also specific interest-only mortgages for over 65-year-olds, known as retirement interest-only mortgages. These are designed to help older borrowers who don’t qualify for a standard residential mortgage. The loan is secured against your home.

Retirement interest-only mortgages work in a similar way to standard interest-only mortgages, as you only pay back the interest each month, not the loan. However, there are some key differences:

• The loan is usually only paid off when you die, move into long-term care or sell your home.

• You only have to prove you can afford the monthly interest repayments, not the amount borrowed.

You can use a retirement interest-only mortgage to pay off an existing mortgage or you can use it to provide extra funds in retirement. It’s also possible to move home with a retirement interest-only mortgage.

Some retirement interest-only mortgages are more flexible than others and allow you to pay off some of the capital each month, as well as the interest. This will help reduce the total amount owed, which means more of your property can be passed on to your loved ones. 

Equity release schemes can be used to access some of the cash tied up in your home. You can then use this cash to help fund your retirement, pay for home improvements or even subsidise a trip around the world.

There are two types of equity release:

• Lifetime mortgage

• Home reversion plan

A lifetime mortgage, which is available to those aged 55 and over and is a loan secured against the value of your property. The amount borrowed is then repaid, plus interest, when you move into long-term care or pass away. No repayments are required until then, but you can choose to pay off some of the interest each month, which will reduce the overall cost. 

A home reversion plan allows you to sell all or part of your home below the market value rate in return for a lump sum or regular payments. You can remain living in your home until you die or move into care, as long as you maintain it. 

Equity release can have major implications for tax, benefits and inheritance, so it’s essential to seek financial advice first. 

If you’re looking to downsize or your home is no longer suitable for your needs, the Older People’s Shared Ownership scheme might be worth considering. The scheme is available in England for those aged 55 and over.

Through the scheme, you can buy any home that’s for sale on a shared-ownership basis (part-rent/part-buy). You can buy a share of between 10% and 75% of the home’s value and pay rent on the remaining share.

You can choose to buy more shares in your home as and when you can afford to, but unlike the standard shared ownership scheme, you can only buy up to 75% of the home. Once you own 75%, you won’t have to pay rent on the remaining share.

To qualify, your household must earn no more than £80,000 a year if you live outside London and no more than £90,000 if you live in London.

You must also be unable to purchase a home suitable for your needs without assistance, and you should not already own a home - or you will need to sell any existing property owned before buying through the scheme.