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Mortgages for the over 55s

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Mortgages for the over 55s

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Last reviewed on 1st September 2023 by Martin Alexander (Mortgage Advisor)

Although there are many different types of mortgages for over 55s, age can still play an important factor. As a result, if you’re aged 55 or over, you’ll need to be tactful when searching for a mortgage. That being said, there are many mortgage options to choose from if you’re over 50.

If you’re retired, you may benefit from mortgages designed for those in retirement. This is why it’s useful to understand your options in detail, so you’re able to select the mortgage most suited to your circumstances.

You may be in a financial position that allows you to enjoy your time. Selecting the right mortgage can certainly allow this to continue, but getting it wrong can do quite the opposite.

This guide will explain everything you need to know about getting a mortgage in your later years. Our advisors are also available to help you further if needed.

Can I get a mortgage if I’m over 55?

Yes, it’s possible to get a mortgage over 55. Although there isn’t a maximum age limit to get a mortgage, most lenders do have restrictions in place. Some lenders have maximum age limits which can vary from 65 all the way up to 85. That being said, some lenders don’t have any upper-age restrictions at all and make assessments on a case-by-case basis.

The main reason why some lenders have age restrictions in place is because of affordability. For instance, if you’re retired, your income may be insufficient for a mortgage. Nonetheless, it’s likely you’ll have savings or investments that can cover a mortgage and that’s why some lenders will be happy to consider you. Furthermore, you may still be working, so passing an affordability check won’t be an issue.

On the other hand, there are lenders that will require you to repay your mortgage before a certain age. For instance, if you’re over 50, certain lenders may limit the length of your mortgage term to 15 or 20 years. Some lenders may require you to repay your mortgage before you’re 70, others before you’re 80. Other lenders won’t have any restrictions whatsoever.

The length of your mortgage term can affect the amount you’ll have to repay each month. Shorter mortgage terms will result in higher repayments each month, so it’s not something to overlook.

Which lenders offer mortgages for over 55s?

Although most mortgage lenders will consider you irrespective of your age, some are better suited than others. Certain lenders may allow for a lengthier mortgage term to keep monthly repayments low. Furthermore, some lenders may also allow you to borrow more than others based on different affordability measures.

Typically, building societies are known to offer more flexibility for those over 50, but that’s not always the case. Some high street lenders offer specific mortgages to those who are retired and can be better than the deals offered by building societies.

Choosing the right lender will largely depend on:

  • The length of your mortgage term
  • Fees and costs involved
  • Interest rates
  • Upper age limits
  • Affordability measures

Once you consider these points, it’ll become clear as to which lenders are the most suited. Nonetheless, each lender varies in their criteria so it’s important to consult an advisor. We’ll then give you an idea of suitable lenders, as each applicant will have different requirements.

How to apply for a mortgage if you’re over 55

If the lender you’ve applied with has age restrictions, you’ll have to be sure the rest of your circumstances meet their requirements. For instance, your income will at least need to meet the requirements of the mortgage you’re applying for. Although you may have an income from employment now, lenders will check whether you’ll be able to repay the mortgage once you’ve retired.

It’s a good idea to collate information regarding your income post-retirement. For instance, if you’re planning on using income from investments, savings, or a pension, you’ll need to have the relevant paperwork to show lenders. This can be in the form of bank statements or evidence of pension payments.

Lenders will want to look ahead and whether you’ll be able to repay the mortgage in your later years. This is why you should also assess your own finances to showcase your ability to repay your mortgage, even when retired.

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Can I get a mortgage after I retire?

Lenders understand that many of us may want a mortgage after retirement. As a result, some lenders offer unique mortgages for over 55s. These mortgages may be better suited when compared to regular mortgages and can allow you to enjoy your later years without having to worry about finances.

Mortgages for over 55s include:

  • Lifetime mortgages
  • Home reversion plans
  • Shared ownership schemes for older people
  • Interest-only mortgages for retirement

Lifetime mortgages

Lifetime mortgages are a form of equity release and can only be taken out once you’re 55. You’ll still own your property and will receive a large lump sum or smaller payments spread out over a period of time. The loan is then repaid when you die or move into a care home.

Home reversion plans

Home reversion plans are quite similar, but you’ll sell part or all of your home to a provider in return for a lump sum. The funds can also be spread out over a period of time and you can remain living in your home.

Although you won’t own your home, you’ll still have to maintain it. Once your plan comes to an end, the reversion provider will sell the property to recoup their funds. Home reversion plans and lifetime mortgages can only be taken out if you already own your own home.

If you’re looking to purchase a new home, you may benefit from a retirement interest-only mortgage or a shared ownership mortgage which is tailored for borrowers approaching retirement.

Buy to let mortgages for over 55s

Over 55s are likely to be in a stronger financial position than younger applicants. As a result, you may have surplus capital in the bank to invest. The rent achieved from your buy to let can then provide you with an income during retirement.

Getting a buy to let mortgage when you’re over 55 shouldn’t be that difficult. This is because your investment will create an income. For this reason, most lenders will assess the amount of rental income your investment will generate, rather than your age.

It’s common for retirees to invest their pension and other savings into a property or even a portfolio. Although lenders understand the demand for buy to let mortgages for retired applicants, it’s still something you’ll need to prepare for.

Being declined a mortgage because of your age

We’ve received many enquiries from applicants who have been declined a mortgage because of their age. Shortly after, we managed to secure the same applicants with a mortgage. If you’ve been declined a mortgage because of your age, we can help.

It’s likely you’ve been declined because your application has been placed with an unsuitable lender. As we’ve mentioned, lenders have varied criteria for mortgages and age limits. Furthermore, each lender has different affordability measures for assessing applicants.

Our advisors are specialist brokers. We’ll assess your overall financial profile along with your age and only then will we find lenders that are suitable. This largely minimises the risk of being declined. Age certainly shouldn’t be a barrier to getting a mortgage but a poorly structured application often can be.


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About the author

Martin Alexander
Senior Mortgage Advisor | More Articles

Martin is a senior mortgage advisor and has held a CeMAP qualification for over 15 years while also completing an MBA in Global Banking & Finance.