Am I too old to get a mortgage?” - Not if we can help it!
Lots of older borrowers approach us wanting to know if they can get a mortgage as a pensioner, and what the maximum age for mortgage lending is in the UK. Many retired people think that they are too old for a mortgage but this is not necessarily the case; you just need to work with the right broker!
While there are some mortgage schemes available specifically aimed at pensioners such as equity release (AKA lifetime mortgages) or retirement interest-only, this article will be discussing standard mortgage options for retired people, which can be either repayment plans or interest-only.
So, can a pensioner get a mortgage? While it is true that many lenders impose maximum mortgage age limits, it is certainly possible to get a mortgage as a retired person.
After retirement, you no longer have a regular salary coming in. Your income is likely to decrease, and as such it is more difficult to assess whether you will be able to keep up with mortgage repayments. This is one reason older people are typically seen as higher risk when it comes to getting a mortgage.
What’s more, the older or less healthy the borrower, the more risk they pose in the eye of a lender as in terms of managing to fulfil the full mortgage term. This is why many cap on what age you can a mortgage until.
What are the main factors affecting getting a mortgage if you’re retired?
One of the most important factors for lenders is your affordability, as with any standard mortgage.
If you’re not yet retired but plan to be in 10 years, for example (say you’re 45 and plan to enter retirement age 55) some lenders may consider your mortgage application based on your current income from employment and limit the mortgage term accordingly.
As a retiree, you will need to be able to prove that your pension income can comfortably cover your repayments, as well as any other outgoings. This will typically work out the same as that of a standard mortgage, with most lenders allowing a loan of 3 - 4x your annual income, and some potentially up to 5x - 6x.
If you’re applying for an interest only mortgage, some lenders may consider a figure that exceeds this sum. Likewise, if you’re using a secured loan to release cash, a few lenders may be happy to exceed up to 10x your income, in the right circumstances.
Since some mortgage providers won’t lend to anyone over a certain age, being in your retirement years could mean that you’re limited to certain term lengths.
This is unlikely to be the case at certain lenders but if, for example, the provider has an age limit of 75 on a standard residential mortgage and you’re 60, you might be limited to a restricted term, which would likely result in high monthly payments.
We often hear questions like “can I get a mortgage at 47 years old?”, “can I get a mortgage at 54 years old?” and “can I get a 30 year mortgage at age 40?” The answer, in many cases, is yes - but the term length could impact affordability.
There’s good news, though: while some lenders will restrict the term to prevent a mortgage from running into your retirement years, there are providers who have no problem offering mortgage products that will not be paid off until after you retire.
Whether you qualify for these deals will depend on a number of factors, including…
Your expected retirement date
The current value of your pension pot
Your forecast retirement income
Loan to Value (LTV)
How much deposit you have is a key consideration for all mortgage providers, and for retired people on a standard plan this is no exception.
For repayment mortgages, most lenders are happy to approve with 80%+ LTV (more is likely to work in your favour), some lenders will consider you with 85% LTV, and a handful may accept 95% LTV (5% deposit) - if affordable, and subject to other eligibility checks.
For standard interest-only plans, the minimum LTV is usually around 15% minimum, but for older applicants it tends to be higher, around min 25% LTV with sale of the property at the end of the period as a repayment vehicle. Unlike a retirement interest-only mortgage, these plans will have a fixed end date by which the capital would need to be repaid.
What is the upper age limit for a mortgage?
So, what age can you get a mortgage up to? While the above factors will play a significant role on eligibility, different providers tend to have a set age limit on the oldest age you can get a mortgage, regardless of your other circumstances.
Generally speaking, the older you are the fewer lenders will be willing to lend to you due to the associated risk. The following table illustrates the likelihood of being approved for a mortgage as pensioner, broken down by age.
Table of maximum age limits for mortgages
Age of borrower applying for mortgage
Likelihood of acceptance
Getting a mortgage age 50
Lots of providers are happy to lend to borrowers up to the age of 70, when many impose an age restriction mortgage cap.
Provided you meet the other eligibility criteria, you may be able to borrow on a fixed term of up to 30 years.
Getting a mortgage age 55
Getting a mortgage age 60
Getting a mortgage age 65
Getting a mortgage age 70
Getting a mortgage age 75
While many limit borrowing at age 70, some will lend up to age 75 and a handful up to 80 years old if you meet all their criteria.
Getting a mortgage age 80
Getting a mortgage age 85
Contrary to belief, it is possible to get a standard mortgage over the age of 85, and a few lenders have no age limit. While you will be more limited in choice of lenders, rates should still be competitive across those that do consider you.
Other factors that will count in your favour is affordability, having a clean bill of health, clean credit, low LTV, and a shorter mortgage term.
Getting a mortgage age 90
Getting a mortgage age 95
Getting a mortgage with no age limit
Other factors impacting getting a mortgage if you’ve retired
As is the case with all mortgages, every lender is different when it comes to what they will or won’t accept in terms of bad credit.
The majority may decline if an instance of adverse has occurred recently, or if it is a particularly severe issue.
Others are happy to consider a wider range of issues, from late payments, to IVAs to bankruptcy - it all depends on the lender and your other circumstances.
However, bad credit can be more of an issue when borrowing later in life, especially if you are well past retirement. This is because there are already fewer lenders willing to lend to older applicants due to the risk they pose, meaning even fewer will be accepting of more serious instances of adverse.
Visit our bad credit section for more information on how different forms of adverse impact mortgage eligibility.
As there are a smaller number of lenders offering later life mortgages, it stands to reason that rates are likely to be higher because there is less competition - it all depends on what rates are on offer at the time.
However, if you are just seeking a standard mortgage rather than a specific product for pensioners or older people, rates should be as competitive as they would be with any application. Speaking to a whole of market broker will help ensure you get the very best rates on the market.
Lenders tend to be more cautious when it comes to non-standard constructions because they are seen as higher risk, and therefore harder to sell when the term comes to an end.
But then again, every lender has their own criteria, and some are happy to accept certain types of non-standard property where others will not, the same way as with any other mortgage type.
Why you should speak to an expert later life mortgage broker
We’ve helped over 45,000 people find the right mortgage for their circumstances, even those with bad credit. In fact our customers regularly rate us 5 stars on Feefo, mainly because we offer access to expert brokers who are:
Whole of market
Already know the lenders to go to as they successfully arrange these already.
Experts on retirement mortgages
Are OMA Accredited advisors
Have completed a 12 module, LIBF certified training course
Speak to a retirement mortgage expert today
If you have questions about later life lending and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0800 304 7880 or make an enquiry here.
Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.
*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA.Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes.
The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete's presence in the industry as the 'go-to' for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!
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