Am I too old to remortgage? | Is there a maximum age?

Home / Andy's Blog / Am I too old to remortgage?

Am I too old to remortgage?

Is there a maximum age limit to remortgage?
Table of Contents
    Add a header to begin generating the table of contents

    Once upon a time, 50 was considered old. These days 50 is the new 40 as more people are living longer and enjoying life in their middle to later years.

    Many people incorrectly assume that they will be unable to get a mortgage past the age of retirement, but there are several options for an older borrower’s mortgage, and the maximum age may surprise you.

    Why might older borrowers want to take a new mortgage or remortgage?

    When we think about home ownership and mortgages, many people expect to have paid off their mortgage by the time they retire. However, there are a few circumstances when an older borrower might choose to take a new mortgage:

    Increasing monthly disposable income

    If all your wealth is tied up in your property and you don’t want to move, you might decide to release some equity from your home to help meet escalating costs of living.

    Fund home improvements

    You may wish to add a loft extension, a conservatory or re-landscape your garden, all of which are substantial purchases. The cheapest way to borrow money for this could be a mortgage rather than a personal loan if you don’t have sufficient cash in the bank.

    Helping family members

    Maybe your children need help to get on the property ladder, or perhaps you want to provide support to grandchildren going to university.

    Consolidating debts

    Personal loans and credit cards are expensive ways to borrow, so an older borrower mortgage could be a good way to reduce the repayment and interest at the same time.

    Splash out on foreign holidays or a new car

    You only live once, so why not treat yourself if you have equity in your property that could be used to fund your lifestyle now?

    Repay an interest-only mortgage which is due for repayment

    If you have an interest-only mortgage and lack the funds to repay this, for example, downsizing is not an option; looking at an Equity Release loan could be a feasible alternative to downsizing, which often comes at a high financial and personal cost.

    Is there a maximum age limit for a mortgage?

    Some mortgage lenders now offer a range of products aimed at people past retirement age simply because people are living longer and need access to additional monthly income without wanting to sell their property.

    As with other mortgages, there will be different criteria for each lender and product, including income requirements, credit history, affordability assessments, and maximum age limits.

    What is the oldest you can get a mortgage?

    Many products from high street banks have upper age limits of around 65-75. However, it is possible to get an older borrower mortgage, even up to the age of 80-85, from some specialist lenders, with some offering no maximum age limit.

    The loan can be repaid upon death or moving into long-term care. These are known as Retirement Interest Only Mortgages or Term Loans.

    What mortgage options are available to older people?

    There are a range of older borrowers’ mortgages on the market. Typically these products are known as equity release mortgages, but different types of mortgages exist for different circumstances.

    Retirement interest-only mortgages (RIO mortgages)

    Like a standard interest-only mortgage, a RIO or retirement interest-only mortgage is good for older borrowers who want to keep mortgage payments as affordable as possible. These products are only available on your main residence and are paid off when you die, sell the property, or move into long-term care.

    Lending is based on your retirement income, for example, pension and investment income or your current income, usually the lower of the two. Lenders simply want to see that the mortgage is affordable for the full term of the loan. So a sustainable income is key.

    Lifetime mortgages (Equity Release)

    A lifetime mortgage is a mortgage that only gets paid off after your death. The capital and associated interest are paid to the lender out of the proceeds of your property sale.

    This product is good for older borrowers who are asset-rich and cash poor and is perfect if your retirement income is limited, as there are no compulsory interest payments to make. You can look to make interest payments or even capital repayments if this is affordable and part of your overall plan. Otherwise, the interest is compounded, rolled up and repaid when you pass away or go into long-term care.

    Some considerations with a lifetime mortgage are that they can be expensive to set up, and if you decide you want to end the arrangement, there could be substantial exit penalties. Interest rolls up and compounds unless you choose to service or clear down the interest, which is available with the majority of modern products.

    So if you don’t meet the affordability of an RIO mortgage, Equity Release can often be used as an alternative as you can still opt to pay interest each month or on an ad hoc basis. Mortgages are usually flexible and can be transferred should you move or repay early, but fees may apply to some loans.

    Drawdown mortgages

    If you want more flexibility in your borrowing, you could opt for a drawdown mortgage. These mortgages usually offer a smaller cash lump sum initially with the option to draw down further lump sums in the future.

    The advantage of this type of mortgage is that you’ll be pre-approved to a maximum limit, but you’ll only be charged interest once you draw from the facility. These are great products if you want to top up your income in retirement.

    Do mortgage lenders impose more restrictions when you’re over 60?

    Irrespective of your age, when you apply for a Retirement Interest Only (RIO) mortgage, you will need to meet the lender’s specific criteria. This will involve the lender checking your financial records for evidence of a strong credit history, your property value, your monthly pension income, monthly outgoings, and of course, any outstanding balance you might have on an existing mortgage.

    The loan amount offered may depend on your term length (if there are monthly payments) and how much equity you have in your property based on its current market value.

    How can Simmonds Mortgage Services help you?

    Being older or retired is not a barrier to getting later-life mortgages which can allow you to have a better quality of life, help a family member or travel the world.

    Whatever you want to do with the extra cash, at Simmonds Mortgage Services, we can search the whole of the market to find the right mortgage for your personal circumstances. Get in touch today on 01184 693037 and tell us about your dreams for the future.

    Frequently asked questions about retirement mortgages

    To find out more about retirement mortgages, check out our FAQs or contact us today:

    Can I get a mortgage on a state pension?

    Yes, it is possible to get a mortgage on a pension income. Lenders will have their own mortgage eligibility rules about affordability, your financial circumstances, upper age limit, loan to value, and other criteria, so shop around for the right lender and product to suit you.

    Can you get a joint mortgage if your other half is retired?

    Yes, you can get a joint mortgage with your retired partner. The mortgage application will need to provide sufficient evidence of monthly income to establish you can make the repayments using your regular salary and any pension income.

    Can you pay off a retirement mortgage early?

    Yes, you can choose to repay your loan before the end of the mortgage term, although early repayment fees could be expensive.

    Do retirement mortgages have different LTV rates to other mortgages?

    The loan-to-value rates offered will depend on the individual lender’s product. Ask a mortgage broker to search the market to find the best deal for your situation.

    Can you get standard repayment mortgages if you are over 65?

    Some lenders offer products to those over 65’s, but they will likely offer a shorter mortgage term, such as 10 or 15 years for a repayment mortgage.

    Conclusion

    If you are approaching retirement age and you are concerned about your financial circumstances and living with the means of your private pension, a retirement mortgage could be the answer.

    Although there are fewer lenders when you are an older borrower, there are plenty of options to get a mortgage for releasing equity to boost your retirement income. Ask Simmonds Mortgage Services for specialist advice.

    Picture of Andrew Simmonds

    Andrew Simmonds

    Andrew Simmonds is the managing director at Simmonds Mortgage Services. He's been providing mortgage advice to home owners for many years.

    About Us
    See our other news articles
    How to start the home buying process as a first-time buyer

    The process of buying a house or flat can take many weeks...

    Read More
    Step-by-step guide to buying your first home

    Buying a house or other property for the first time can be...

    Read More
    Setting up a limited company as a landlord

    If you rent out one or more properties, you’ll need to pay...

    Read More

    Google Reviews

    Google Rating
    5.0
    Based on 315 reviews
    js_loader

    Request a Call-back

    Please complete our website contact form and a mortgage advisor will call you back, or book a meeting with us:
    Scroll to Top