Mortgages in Retirement

Posted on 9 April 2010 by Mrs F Slater


We are both pensioners (63 and 66). We have combined pensions of £18500 per annum. We wish to move property but we will need a mortgage of about £45000. Will it be possible to get a mortgage at our age and if so will we get the amount we want. Our credit rating is excellent, 999 is my current score with experian. Please advise.

Freda

It should certainly be possible to get the mortgage you are looking for, although your ages will restrict the number of Lenders willing to consider an application. You will also find that most of the High Street Lenders will want you to repay you mortgage by the time you are 75 and this may have some consequences regarding how affordable such a loan would be?

In addition to the usual types it is possible to arrange what is known as an Equity Release mortgage whereby you do not make monthly repayments and the interest charged is rolled up and repaid on the sale of the property. I recommend that you seek independent legal advice before considering this type of mortgage as it can have quite an effect on your estate when you die and can lead to any beneficiaries receiving far less than they otherwise might.

There is one lender offering a halfway house which they call their 'Retirement Homeplan'. With this the mortgage is not repaid until the property is sold, meaning you have no restriction on the term, but the interest is paid back monthly, meaning your debt does not get any bigger.

I recommend that you speak to an independent mortgage broker about your requirements and the different options open to you.

Peter

Answers provided in response to Ask the experts 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.

You are currently offline. Some pages or content may fail to load.