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Mortgages for the over 55s

Last updated on 20th February 2024 by Martin Alexander

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

If you’re retired, you may benefit from mortgages designed for those in retirement. This is why it’s helpful to understand your options in detail so you can 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 for mortgages, most lenders have restrictions. Some lenders have maximum age limits ranging from 65 to 85. That being said, some lenders don’t have any upper-age restrictions and make assessments on a case-by-case basis.

Some lenders have age restrictions in place because of affordability. For instance, if you’re retired, your income may be insufficient for a mortgage. Nonetheless, you’ll likely 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, some lenders 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 monthly repayments, so it’s not something to overlook.

Which lenders offer mortgages for over 55s?

Although most mortgage lenders will consider you irrespective of age, some are better suited. Certain lenders may allow a longer mortgage term to keep monthly repayments low and allow you to borrow more based on better affordability measures.

Building societies are typically known to offer more flexibility for those over 50, but that’s not always the case. Some high-street lenders offer mortgages for retired applicants, which can be better than the deals from 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 will become clear which lenders are the most suited. However, each lender varies in 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 mortgage you’re applying for. Although you may have an income from employment now, lenders will check whether you can repay the mortgage once you retire.

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

Lenders will want to see whether you can repay the mortgage in your later years. This is why you should also assess your finances to showcase your ability to repay your mortgage, even when retired.

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 worrying 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 receive a large lump sum or smaller payments over time. The loan is repaid when you die or move into a care home.

Home reversion plans

Home reversion plans are 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 time, and you can continue living in your home.

Although you won’t own your home, you must maintain it. Once your plan ends, the reversion provider will sell the property to recoup their funds. You must own your home to be eligible for a home reversion plan or lifetime mortgage.

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

Buy-to-let mortgages for over 55s

Applicants aged over 55 will likely be in a stronger financial position than younger applicants. As a result, you may have surplus capital in the bank to invest. The rent from your buy-to-let can provide you with an income during retirement.

Getting a buy-to-let mortgage when you’re over 55 shouldn’t be difficult. This is because your investment will create an income. For this reason, most lenders will assess the 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.

You’ve likely been declined because your application has been placed with an unsuitable lender. As we’ve mentioned, lenders have varied mortgage criteria 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 suitable lenders. 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.

About the author

Martin Alexander
Senior Mortgage Advisor

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