Can I Get a Mortgage if I'm Over 50 or 60 Years Old?

Answered on 25 November 2019

I’m over 50 and will soon be approaching retirement, but I’d like to take out a mortgage. What’s the maximum age for a mortgage and are there mortgages for pensioners or people over 50 or 60?

A whole section of the mortgage market called “later life lending” is dedicated to people over 55, so there are certainly mortgages for people over 50 and 60 years old. There are even mortgages for pensioners with no other means of income.

There are quite a few different options, but what’s specifically available to you will depend on your age, retirement age, income, the term of the mortgage and how much you want to borrow.

What Is the Maximum Age for a Mortgage?

The maximum age for most normal mortgages – i.e. the age you need to have paid it off by - is 75.

Your age isn’t the only factor that can affect your mortgage though. Lenders need to consider your age at the end of the mortgage term in conjunction with a few other variables when you take out a mortgage at over 50 or 60 years of age.

Lenders must consider:

  • Your age at the end of the mortgage term
  • Your age at application and the length of the mortgage term
    • While there’s no official maximum age at application, your age will determine the mortgage term available to you in order to ensure you won’t exceed the lender’s maximum age limit before you finish paying your mortgage
    • The minimum mortgage term for most mainstream mortgages is 3 – 5 years and the maximum mortgage term is 25 – 40 years
  • Your retirement age and income post retirement – if you intend on continuing to pay the loan into retirement
    • State retirement age varies, but most lenders usually consider it to be around 70 years old
    • If you take out a mortgage while you’re still working but with a term that would continue into retirement, the lender will only use your income after retirement to calculate what you could afford in mortgage payments and consequently, how much they could lend you
    • Most people have less income after they retire, so taking out a normal mortgage with a term that will exceed your state retirement age may limit how much you could otherwise borrow
    • The lender will ask for evidence of any pension or other income you will receive after you retire (e.g. investment or rental incomes)

Your age doesn’t need to hinder you from getting a mortgage though. There are some later life lenders that provide mortgages with terms that go beyond 75 years old. We go through these in the next section.

Mortgages for Over 50s and 60s

Later life mortgages are typically only available to people over 55.

These options include:

  • Normal mortgages with maximum ages above 75
  • Equity release
  • RIO (retirement interest-only) mortgages

Normal Mortgages with Maximum Ages Above 75

You can sometimes take out a normal mortgage with a higher age limit to purchase a new property or just remortgage. Most lenders require that a borrower pays off their mortgage before they reach 75, although there are some lenders with higher age limits that offer mortgages up to 80, 85 and 90. There are even a few that have raised their age limits to 95.

These lenders will still calculate your affordability based on only your potential monthly income in retirement if you’ll retire during the term of the mortgage, as they need to make sure you’ll be able to keep paying the mortgage after you finish working.

Lifetime Mortgages

There are several types of lifetime mortgage – equity release and RIO (retirement interest-only) are the most commonly used options. 

We explain them below, or see our guide for further information on how lifetime mortgages work.

Equity Release

An equity release mortgage is a mortgage you take out on a property you already own and have equity in, to release money you can use on other ventures – like home improvements, general cash flow, helping out your family, or even to buy a holiday home.

You continue to live in the property but don’t make any monthly capital or interest payments. The interest is rolled up – i.e. added to the mortgage balance - and the lender only makes their money back when the property is sold, typically after you pass away or enter long term care. 

RIO (Retirement Interest-Only) Mortgages

A RIO mortgage is a mortgage you can take out to purchase a property or remortgage your current one. You only make interest payments each month with a RIO mortgage, not capital payments. The amount you borrow is repaid when the property is sold after you die or enter long term care with no prospects of returning to the residence.

Other Considerations

Do I Need Life Insurance?

It’s not mandatory that you take out a life insurance policy when obtaining a mortgage, however you need to consider what will happen to you or your family if you passed away and your pension income ceased as a result. You and/or they could be left without the means to repay the mortgage which could result in repossession of the property.

Mortgages for Pensioners

There are mortgages for pensioners and people over 70. They’re sometimes referred to as “retirement mortgages”.

Mortgages available to people who have already retired include:

  • Normal mortgages with maximum ages above 75
  • Equity release
  • RIO (retirement interest-only) mortgages

If you’re a pensioner who takes out a normal mortgage with a maximum age above 75 or a RIO mortgage, the lender will use your income at retirement – including your pension and any other income - to determine what you can afford to borrow.

It’s different with equity release. The lender doesn’t usually require information about your income, as the mortgage interest payments are rolled up – added to the mortgage – and ultimately repaid when the property is sold.

Equity release and RIO are examples of lifetime mortgages for pensioners.

See our guide for more information on mortgages for pensioners.

Do I Need an Interest-Only Mortgage?

Whether you need an interest-only mortgage – and what kind - will depend on your individual circumstances.

Interest-only mortgages can result in lower monthly payments, making them suitable for many pensioners and people over 50.

But not everyone wants or needs an interest-only arrangement. Some people don’t want the mortgage balance to remain outstanding until the sale of the property; they want to clear the balance and can afford to do so. If you’re in this situation, you can look at taking out a traditional repayment mortgage for a term that suits your budget, or at a RIO or equity release mortgage that allow overpayments to reduce the outstanding balance each year.

Ask The Mortgage Experts answers are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them. We recommend you seek professional advice with regard to any of these topics where appropriate.