It’s absolutely possible to get a mortgage over 60, but it can be more difficult than it is for younger applicants with certain mortgage types. This is because income drops during retirement for most people, so lenders are more concerned about your ability to meet the repayments once you retire.
The good news is, lenders are beginning to appreciate that we have an ageing population in the UK, with many people starting families later in life. Mortgages for over 60s are, therefore, absolutely necessary - and many lenders provide products aimed specifically at older borrowers.
Some lenders also approve traditional residential mortgage applications for older applicants who meet their maximum age at the end of the term criteria. For many lenders this is around 85, so a 60 year old could theoretically still get a 25 year mortgage, assuming they had the deposit and income to support it.
Older borrowers usually need to go further to prove affordability into retirement. This could be by providing forecasted retirement income, especially those nearing retirement or already retired.
Work out what you require from a mortgage. Do you want an equity release product or a retirement interest-only mortgage? Or are you looking for a standard repayment mortgage? Make sure to speak to an expert if you're unsure about the different mortgage available.
A mortgage broker may be help advise you on the different options available. They can also help identify which lenders might be able to consider you depending on your financial circumstances.
If you are interested in an equity release product, such as a lifetime mortgage, it's best to speak to an equity release specialist. Our partner Responsible Equity Release can help you understand your options. Click the button below to get started.
THINK CAREFULLY BEFORE SECURING DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER LOAN SECURED AGAINST IT.
Older borrowers tend to benefit from using a mortgage broker, as they can sift through the lenders who are more open to older applicants. They know lender criteria well and can save you the hassle of contacting multiple lenders and potentially being turned down.
Due to lender age limits, you may not be offered as high a loan amount as a younger person who could take out a mortgage over a longer term. The maximum age for getting a mortgage varies from one lender to the next, but some actually have no age limit at all.
If you decide to look at equity release as a retirement mortgage option, it’s absolutely essential that you seek independent financial advice from a qualified equity release broker registered with the Equity Release Council (ERC). They will ensure you're not putting your home at unnecessary risk.
If you’re not able to qualify for a standard mortgage or it's not suitable for your needs, there are some products specifically aimed at the retired and/or those over the age of 60. Below we’ll look at these options in a little more detail:
A retirement interest only mortgage (or RIO) is a great option for older borrowers who are retired and looking to downsize to a smaller property or remortgage, perhaps to pay off their original mortgage.
This is typically a cheaper option than equity release, however, the major difference is that you have to pay interest, whereas with equity release it's optional.
Equity release products can help you to access the cash value within your home without having to sell it. However, they are very expensive products that have a number of significant risks associated with them, so you should seek expert advice before applying.
There are two types of equity release product:
However, home reversion is less popular nowadays so there are fewer lenders offering them.
As with any mortgage, the lender needs to be confident that you can afford the repayments and that you have a reliable credit history. You therefore have a better chance of qualifying for a mortgage over 60 if you:
Have a regular income, whether that's from a pension, investments or work
Have a significant amount of equity in your home
Can provide a substantial deposit or offer up other assets to secure your borrowing against
Mortgages specifically designed for older borrowers are likely to be easier to qualify for than a traditional residential mortgage, as the affordability requirements are lower for a RIO and you won’t need any income for equity release.
That said traditional mortgages for the over 60s are available from many lenders, so long as you meet their criteria.
If you don’t qualify for any of the above, OPSO offers another option. It works exactly the same as the main shared ownership scheme, but is only available to the over 55s and you'll only be able to buy a maximum share of 75% of your home.
Once you own 75% you won’t have to pay any rent on the remaining 25% share to the housing association, however.
The majority of lenders with more flexible age requirements that are likely to offer over 60 mortgages are building societies and specialist lenders, rather than banks.
However, there are some high street lenders who have a maximum mortgage repayment age of 85. A mortgage broker will be able to help you assess the options available to you and decide whether a traditional mortgage or more specialised mortgage - designed for the over 60s specifically - will suit you best.
With equity release you'll need to meet minimum age limits, rather than maximum ones. You must be at least 55 to get a lifetime mortgage and 60 to get a home reversion plan. Always ensure that any equity release provider you opt for is a member of the Equity Release Council.
The Equity Release Council has their own directory of qualified equity release advisers and reputable equity release providers that you can choose from.
So long as you’re still able to prove that you can afford the repayments on a mortgage, you can take out a mortgage once you've retired.
You'll need to bear in mind your age at application and the maximum age by which you will need to have paid the mortgage off - which varies by lender. The lower the maximum age limit, the shorter the mortgage term you can have, which can drive up the cost of the monthly repayments.
You may find that a retirement interest-only mortgage or equity release are better suited to your needs in retirement.
Yes, some lenders do offer buy-to-let products for older borrowers. There can actually be a little more flexibility with upper age limits when it comes to buy-to-let, compared to residential mortgages. A mortgage broker will be able to direct you to those lenders most likely to accept your application.
There is no blanket age that is ‘too old’ to take out a mortgage, no. Different lenders have different age caps on the age by which you must have fully repaid your mortgage, usually between 70 and 85 years, however, some lenders have no upper age limits at all.
You may well have to pay higher interest rates the older you are on application, however. This is because those lenders willing to consider older applicants are taking on a slightly higher risk in lending than for younger applicants.
The length of the mortgage offered to you when you're over 60 depends on the lender and their age limits.
For example, if they require the loan to be fully paid off by the time you're 75 and you apply when you're 60, you may be offered a 15-year term.
However, lenders have different age restrictions (some have no age limits at all) so you may find you're able to get a longer term.
A shorter term means higher monthly repayments, but you'll also pay less interest overall compared to a longer term.
It can be more difficult to get a mortgage when you're over 60 compared to when you were younger as, typically, income becomes less reliable once you retire.
Lenders tend to be more careful about lending to people as they approach or are in retirement. Although there are various products available to older borrowers, so it's still possible to get a mortgage over 60. Just be prepared to prove to the lender that you're able to afford the repayments.